Refinancing activity fell again during
the week ended August 23, driving down the Mortgage Bankers Association's (MBA)
Market Composite Index, a measure of mortgage application volume. The Index decreased 2.5 percent on a
seasonally adjusted basis from the week ended May 16. On an unadjusted basis the index was down 3.0
The Refinance Index has fallen 64.2
percent from its recent peak during the week ended May 3 including a 5 percent
decrease in the most recent period. Refinancing
now represents 60 percent of mortgage activity compared to 61 percent one week
earlier. This is the smallest share of overall application volume refinancing
has captured since April 2011.
Refinance Index vs 30 Yr Fixed
Applications for home purchase had a slightly
better week. The seasonally adjusted
Purchase Index was up 2 percent week-over-week while the unadjusted Purchase
Index was up 0.3 percent for the week and was 6 percent higher than the same
week in 2012. Applications for
refinancing through the HARP program increased from a 34 percent share to 35.
Purchase Index vs 30 Yr Fixed
Average interest rates increased
substantially during the week with contract interest rates for many products
hitting two-year highs. Effective rates
increased across the board.
The average rate for 30-year fixed-rate
mortgages (FRM) with conforming loans balances of $417,000 or less increased to
4.80 percent with 0.41 point from 4.68 percent with 0.42 point. This was the highest rate for the 30-year
since April 2011. The 30-year jumbo FRM
(balances over $417,000) was 4.78 percent with 0.34 point compared to 4.74 with
0.28 point the previous week.
Rates for 30-year FRM with an FHA
guarantee averaged 4.52 percent with 0.32 point, the highest rate since July
2011. The previous week the rate had
averaged 4.40 percent with 0.21 point.
The rate for 15-year FRM jumped 13 basis
points to 3.84 percent, the highest rate since April 2011. Points increased from 0.32 to 0.35.
The most popular of the adjustable rate
mortgages (ARMs), the 5-year hybrid loan, had an average contract rate of 3.50
percent, also the highest rate since April 2011, and an increase of 6 basis
points from the previous week. Points
fell from 0.48 to 0.37. The ARM share of
mortgage applications inched up to 7 percent.
Rates are quoted for loans with 80
percent loan-to-value ratios. Points
include the origination fee.
MBA's weekly survey, conducted since
1990, covers 75 percent of all U.S. retail residential mortgage
applications. Respondents include
mortgage bankers, commercial banks, and thrifts. Base period and value for all indexes is
March 16, 1990=100.