There was a significant drop in mortgage applications, especially for
refinancing, during the week ended June 13 the Mortgage Bankers Association
(MBA) reported today. Results of MBA's
Weekly Mortgage Applications Survey showed a decline in the Market Composite
Index, a measure of application volume, of 9.2 percent from the previous week
on a seasonally adjusted basis and 10 percent unadjusted.
Refinancing slipped from a 54 percent share of all mortgage applications
during the week ended June 6 to a 52 percent share and the Refinancing Index fell
13 percent compared to the earlier week.
The seasonally adjusted Purchase Index decreased 5 percent. On an unadjusted basis applications for
purchase mortgages were down 6 percent week-over-week and were 15 percent lower
than during the same week in 2013.
Refinance Index vs 30 Yr Fixed
Purchase Index vs 30 Yr Fixed
"Interest rates increased
relative to the previous
week, as incoming economic
data continues to suggest a pickup in the pace of growth,"
said Mike Fratantoni, MBA's Chief Economist.
"Although the average rate for the week was up only a few basis points, the increase was matched
by a large drop in refinance volume, and purchase application volume also declined. Some lenders continue
to report that they
have pre-approved borrowers who have been unable
to find a property given the tight inventory
in certain markets."
pointed out, interest rates moved up slightly on all products with the 15-year
fixed-rate mortgage (FRM) making the largest move with an increase of 7 basis
point to 3.50 percent. Points decreased
to 0.16 from 0.22 and the effective rate increased.
The average contract interest rate for 30-year
fixed-rate mortgages (FRM) with conforming loan balances ($417,000 or less) increased to 4.36 percent from 4.34 percent, with points increasing to 0.24 from 0.16. The effective rate increased from the previous week.
Jumbo 30-year FRM (loan balances greater than $417,000) increased to 4.32 percent from 4.27 percent. Points decreased to 0.09 from 0.12 but the effective rate still increased.
Thirty-year FHA-backed FRM saw am average rate
increase of one basis point to 4.07 percent. Points decreased to -0.39 from -0.03 and
the effective rate decreased.
The average contract
interest rate for 5/1 adjustable rate mortgages (ARMs) increased
to 3.20 percent from 3.18 percent, with points decreasing to 0.27 from 0.35. The effective rate remained unchanged from last week. ARMs
continued to hold an 8 percent share of mortgage applications as they have for
nearly all of 2014.
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 information on rates assumes a loan with an 80 percent loan to balance
ratio. Points include the origination