The Mortgage Bankers Association (MBA) said Hurricane Sandy, the powerful storm that slashed through much of the northeast, also impacted mortgage activity last week.  MBA's Market Composite Index, a measure of mortgage application volume, declined 5.0 percent on both a seasonally adjusted and an unadjusted basis during the week ended November 2.

The Refinance Index and the seasonally adjusted Purchase Index each dropped 5 percent from the week ended October 26 as well and the unadjusted Purchase Index was down 7 percent from the previous week and was 3 percent lower than during the same week in 2011.  This was the fifth straight weekly decline in the Refinance Index which is now at its lowest level since late August although the similar slowdown in purchase applications kept the refinancing share of total activity at 80 percent.  Applications for the Home Affordable Refinancing Program (HARP) increased from a 25 to a 27 percent share of refinancing applications. 

"Last week's storm had a significant impact on application volumes on the East Coast," said Mike Fratantoni, MBA's Vice President of Research and Economics.  "Applications fell more than 60 percent compared to the prior week in New Jersey, almost 50 percent in New York and nearly 40 percent in Connecticut.  Other East Coast states also saw declines over the week, while many states in other parts of the country had increases in application volumes."

Purchase Index vs 30 Yr Fixed

Refinance Index vs 30 Yr Fixed

Most contract interest rates decreased during the week as did the effective rates for all but the 15-year fixed-rate mortgage (FRM.)  The contract rate for 30-year FRMs with conforming balances of $417,500 or less was down 4 basis points from the previous week to 3.61 percent with points increasing to 0.45 from 0.39.   The rate for jumbo 30-year FRMs with balances over $417,500 fell to 3.88 from 3.94 percent while points remained unchanged at 0.36.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.37 percent from 3.41 percent, with points decreasing to 0.75 from 0.76

The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 2.95 percent, with points increasing to 0.40 from 0.35 and, as noted above, the effective rate increased.

The market share of adjustable rate mortgages (ARMs) remained unchanged at 4 percent of applications.  The contract interest rate for 5/1 ARMs decreased to 2.61 percent from 2.66 percent, with points increasing to 0.41 from 0.33.

Rates are based on mortgages with an 80 percent loan-to-value ratio and points include the application fee.  All volume and rate data is compiled from MBA's Weekly Application Survey which 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.