This morning the Mortgage Bankers Association (MBA) released its Market Composite Index for the holiday shortened week ended July 6 and reported that, including an adjustment for Independence Day, mortgage applications decreased 2.1 percent on a seasonally adjusted basis from the previous week.  Without adjustments the composite, a measure of mortgage applications volume, was down 22 percent.

The Refinance Index decreased 3 percent from the previous week and the refinancing share of all applications fell to 77.0 percent from 78.0 percent.  The seasonally adjusted Purchase Index was up 3 percent from the previous week but was 17 percent lower on an unadjusted basis and 3 percent below the volume during the same week in 2011.

Purchase Index vs 30 Yr Fixed

Refinance Index vs 30 Yr Fixed

All mortgage rates tracked by the MBA's weekly survey set new benchmark lows during the week and the effective rates for each also declined.  The average contract rate for 30-year fixed rate mortgages (FRMs) with conforming loan balances under $417,500 decreased to 3.79 percent from 3.86 percent with points decreasing to 0.35 from 0.41.  The jumbo equivalent (balances over $417,500) decreased to 4.05 percent with 0.34 point from 4.08 percent with 0.38 point. 

The average rate for FHA-backed 30-year FRM decreased to 3.63 percent from 3.69 percent the previous week with points dropping to 0.36 from 0.50. 

The rate for 15-year FRM fell 5 basis points to 3.15 percent and there was a 4 basis point reduction in average points to 0.43 point.

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs), at 2.76 percent with 0.45 point during the week ended June 29, ended the most recent week at 2.71 percent with 0.36 point.  The ARM share of application activity remained around 4 percent of total applications.

MBA data is collected for loans with an 80 percent loan-to-value ratio.  Points include the applications fee.

The average size of all loans for home purchase in the US was $240,897 in June, down from $243,733 in May 2012. The average refinance loan was for $218,619, down from $226,576 in May.  The largest purchase loans were made in the Pacific region at $ 361,788 as were the largest refinance loans at $ 310,977. 

MBA's Weekly Application 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.