An increase in refinancing drove mortgage applications slightly higher
during the week ended August 1, 2014, even as the number of purchase
applications declined. The Mortgage
Bankers Association (MBA) said its Market Composite Index, a measure of loan
application volume, increased 1.6 percent on a seasonally adjusted basis from
the week ended July 25. On an unadjusted
basis the index was up one percent.
The Refinancing Index gained 4 percent, the same amount by which it had
decreased the week before. Refinancing applications
made up 55 percent of the total volume compared to 53 percent the previous
week. The market share for refinancing
was the highest it has been since March.
Refinance Index vs 30 Yr Fixed
Applications for home purchase mortgages however declined slightly. On a seasonally adjusted basis the Purchase
Index was down 1 percent from the previous week. The unadjusted Index was down 2 percent
week-over-week and was 14 percent lower than during the same week in 2013.
Purchase Index vs 30 Yr Fixed
All contract interest rates and most effective rates increased compared
to the previous week. The average
contract rate for a 30-year fixed rate mortgage (FRM) with a conforming loan
balance of $417,000 or less rose from 4.33 percent with 0.24 point to 4.35
percent with 0.22 point. The contract
rate for jumbo FRM (loan balances above $417,000) increased 4 basis points to
4.26 percent while points increased to 0.35 from 0.23.
Mortgages backed by the FHA had an average contract rate of 4.06 percent,
up 3 basis points from the week before.
Points increased to 0.02 from 0.00.
Fifteen-year FRM saw an average rate increase of four basis points to
3.51 percent. Points increased to 0.28
Adjustable rate mortgages (ARMs) maintained an 8 percent share of mortgage
applications. The average rate for the
5/1 ARM increased to 3.31 percent with 0.35 point from 3.31 percent with 0.40
point. This was the sole product for
which the effective rate decreased.
MBA compiles its indexes from a Weekly Mortgage Applications Survey. The survey, conducted since 1990, covers over
75 percent of all U.S. retail residential applications. Respondents include mortgage bankers,
commercial banks, and thrifts. Base
period and value for all indexes is March 16, 1990=100 and interest rate quotes
assume a loan with an 80 percent loan to value ratio. Points include the origination fee.