A big drop in applications for
refinancing dragged the Mortgage Bankers Associations Market Composite Index, a
measure of mortgage applications volume, lower during the week ended May
17. The index was down 9.8 percent on a
seasonally adjusted basis compared to the week ended May 10 and was down 10
percent on an unadjusted basis.
Refinancing, as measured by
MBA's Refinance Index, was down 12 percent from the previous week and the
refinance share of mortgage activity decreased to 74 percent of total
applications from 76 percent.
Applications for refinancing through HARP increased from 30 percent of
all refinancing applications to 32 percent.
Applications for purchase
mortgages also declined and the seasonally adjusted Purchase Index was 3
percent lower than a week earlier. The
unadjusted index was down 4 percent from the previous week but was still 10
percent higher than during the same period in 2012.
"Mortgage rates increased to
their highest level since March last week, leading to the largest single week
drop in refinance applications this year," said Mike Fratantoni, MBA's Vice
President of Research and Economics.
"The refinance index has fallen almost 19 percent over the past two
weeks and is back to its lowest level since late March. Purchase activity declined over the week but
is still running about 10 percent above last year's pace at this time."
Both contract and effective
interest rates rose for every loan type tracked by MBA in its Weekly
Applications Survey. The average
contract rate for 30-year fixed-rate mortgages (FRM) with conforming loan
balances ($417,500 or less) increased to 3.78 percent from 3.67 percent, with
points decreasing to 0.39 from 0.41. The
jumbo 30-year FRM (mortgage balances greater than $417,500) increased by six
basis points to 3.93 percent with points increasing to 0.36 from 0.25.
Rates for 30-year FRM backed by
the FHA increased from 3.43 percent with 0.16 point to 3.53 percent with 0.13
point. The average contract rate for
15-year fixed-rate mortgages increased to 2.96 percent from 2.88 percent, with
points increasing to 0.32 from 0.31.
The ARM share of application
activity increased during the week to 5 percent of total applications and the
rate for the most popular ARM, the 5/1 hybrid, increased to 2.60 percent from
2.55 percent, with points unchanged at 0.23.
MBA's weekly survey, which has been conducted
since 1990, covers over 75 percent of all U.S. retail residential mortgage
applications. Survey respondents include
mortgage bankers, commercial banks and thrifts.
Interest rate information is for loans with an 80 percent loan-to-value
ratio and points include the origination fee.
Base period and value for all indexes is March 16, 1990=100.