applications surged by 10.3 percent during the week ended June 6. The Mortgage Bankers Association (MBA) said
its Market Composite Index, a measure of application volume increased by that
amount on a seasonally adjusted basis and was up 22 percent compared to the
previous week which had been shortened by the observed Memorial Day holiday.
The increase was
across the board with applications for both purchase mortgages and refinancing
making healthy gains. The Refinance
Index was up 11 percent from the previous week and the seasonally adjusted Purchase
Index rose 9 percent. The unadjusted
Purchase Index was 19 percent higher than the week before but 13 percent below
the level during the same week in 2013.
The refinance share of applications increased to 54 percent from 53
Refinance Index vs 30 Yr Fixed
Purchase Index vs 30 Yr Fixed
activity increased despite a jump in interest rates. All rates reported by MBA from its Weekly
Mortgage Application Survey were up on both a contract and effective basis from
the previous week.
"When we consider the seemingly illogical behavior of rates and applications moving higher together, it's important to keep in mind that there were only really 2 days in the previous week with significantly lower rates than those seen last week," notes Mortgage News Daily's Matt Graham. "It's pretty normal for borrowers to get geared up for a mortgage while rates are falling, but to hold off on locking until it looks like the lows are in. That's exactly what last week gave us."
interest rate for 30 year fixed-rate mortgages (FRM) with conforming balances
of $417,000 or less moved from an average of 4.26 percent with 0.13 point to
4.34 percent with 0.16 point. The jumbo
version of the 30-year FRM (balances above $417,000) had an average rate of
4.27 percent compared to 4.22 percent the previous week and points increased to
0.12 from 0.11.
The average contract interest rate for
30-year fixed-rate mortgages backed by the FHA increased to 4.06 percent from
3.99 percent. Points increased to -0.03
for 15-year FRM averaged 3.43 percent with 0.22 point. The previous week the average was 3.39
percent with 0.07 point.
The average contract interest rate for 5/1 adjustable
rate mortgages (ARMs) increased to 3.18 percent from 3.11 percent, with points
increasing to 0.35 from 0.05. ARMs
continued to hold an 8 percent share of the application volume.
MBA's survey covers over 75 percent of all
U.S. retail residential mortgage applications, and has been conducted since
1990. Respondents include mortgage bankers, commercial banks and
thrifts. Base period and value for all indexes is March 16, 1990=100 and
interest rates are quoted for loans with an 80 percent loan-to-value
ratio. Points include the origination