There was a big jump in the volume of
applications for mortgage refinancing last week as customers reacted to the
lowest interest rates since early summer.
Applications for home purchases also increased slightly during the week
ended October 25.
The Mortgage Banker Association's (MBA)
Market Composite Index, a measure of overall mortgage loan application volume,
was up 6.4 percent on a seasonally adjusted basis from the volume during the
week ended October 18. On an unadjusted
basis the Composite Index rose by 6 percent.
The unadjusted Purchase Index increased 2 percent from the previous week
and was 0.1 percent lower than during the same week in 2012.
Purchase Index vs 30 Yr Fixed
Applications for refinancing were up by
9.0 percent and constituted a 67 percent share of all applications. This was the highest market share captured by
refinancing since June and was 2 percentage points higher than the previous
Refinance Index vs 30 Yr Fixed
Average mortgage interest rates, both
contract and effective, fell during the week for typical 80 percent
loan-to-value ratio loans. Contract
rates for all products tracked in MBA's Weekly Mortgage Applications Survey
were at their lowest levels since June.
The average contract rate for 30-year
fixed mortgages (FRM) with conforming loan balances of $417,000 or less
was 4.33 percent compared with 4.39 percent the previous week. Points, which include the origination fee,
decreased from 0.41 to 0.26.
Jumbo 30-year FRM (loan balances in
excess of $417,000) had an average contract rate of 4.36 percent, down from
4.43 percent. Points increased from 0.26
The average rate for an FHA backed
30-year FRM was 4.06 percent with 0.17 point.
The previous week the rate was 4.15 percent with 0.27 point.
Fifteen-year FRM had an average contract
rate of 3.42 percent, 9 basis points below the average rate a week
earlier. Points were unchanged at 0.30.
Adjustable rate mortgages (ARM) garnered
a 7 percent share of applications, a slight decrease from the previous week. The average rate for a 5/1 ARM was 3.17
percent with 0.38 point compared to 3.25 percent with 0.26 point.
MBA's weekly survey which has been conducted since
1990 covers over 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.