applications fell during the week ended December 14 with both refinancing
and purchase applications slowing as rates rose. The Mortgage Bankers Associations (MBA)
Market Composite Index, a measure of that volume, was down 12.3 percent on a
seasonally adjusted basis from the week ended December 7 and down 13 percent
Refinancing Index decreased 14 percent from a week earlier to the lowest level
since November 2 and refinancing as a share of all applications decreased from
84 percent to 83 percent. Twenty-five
percent of refinancing applications were done through the Home Affordable
Refinance Program (HARP). The seasonally adjusted Purchase Index was 5 percent
lower than the previous week and the unadjusted Purchase Index was down 8
percent week-over-week but was 9 percent higher than during the same period in
"Despite the Federal
Reserve's announcement last week that it would purchase an additional $45
billion in Treasury securities per month as part of its continuing quantitative
easing effort, rates increased in the second half of the week," said Mike Fratantoni, MBA's Vice President
of Research and Economics. "As a result, refinance applications dropped
sharply to the lowest level in over a month."
Purchase Index vs 30 Yr Fixed
Refinance Index vs 30 Yr Fixed
were mixed. The average contract rate
for 30-year fixed-rate mortgages (FRM) with conforming balances of $417,500 or
less increased to 3.50 percent with 0.44 point from 3.47 percent with 0.36
point and the effective rate also increased.
Rates for the jumbo version of the 30-year FRM fell to the
lowest rate in the history of MBA's Weekly Applications Survey, 3.73 percent
with 0.29 point. The previous week the
rate was 3.77 percent with 0.35 point.
The effective rate was also down.
The contract interest rate for 30-year fixed-rate mortgages
backed by the FHA increased to 3.34 percent from 3.32 percent, with
points increasing to 0.54 from 0.51
and the effective rate increased.
Another record low was recorded for the contract rate of
the 15-year FRM at 2.83 percent, down 2 basis points. Points were unchanged at 0.26 and the
effective rate was lower.
mortgages (ARMs) continue to draw only a miniscule 3 percent share of
applications. The contract interest rate for 5/1 ARMs decreased to 2.61 percent
from 2.63 percent, with points increasing to 0.36 from 0.34. The effective rate decreased from last week.
Rates quoted are averages for mortgages with 80 percent
loan-to-value ratios and points include the origination fee. MBA's survey covers over 75 percent of all
U.S. retail residential mortgage applications, and has been conducted weekly
since 1990. Respondents include mortgage bankers, commercial banks and
thrifts. Base period and value for all indexes is March 16, 1990=100.
MBA's offices will be closed during the week of December 24
through January 2. Results of its weekly
application survey will resume on January 3 and will cover the two prior weeks.