The Mortgage Composite Index, a measure of mortgage loan application volume, was up significantly during the week ended January 18, its second strong increase in as many weeks. The Mortgage Bankers Association (MBA) reported that the index increased 7.0 percent on a seasonally adjusted basis, building on a 15.2 percent jump during the week ended January 11. On an unadjusted basis the Index rose 8 percent compared to the previous week.
Refinancing accounted for 82 percent of all applications, unchanged from the previous week, and the Refinance Index was up 8 percent. The seasonally adjusted Purchase Index increased 3 percent from one week earlier and was at its highest level since May of 2010, immediately following the expiration of the homebuyer tax credit. MBA noted that the increase in purchase applications was primarily for conventional loans and the seasonally adjusted Conventional Purchase Index was at its highest level since October of 2009. The unadjusted Purchase Index increased 9 percent compared with the previous week and was 26 percent higher than the same week one year ago.
Purchase Index vs 30 Yr Fixed
Refinance Index vs 30 Yr Fixed
Rates for mortgage loans with 80 percent loan-to-value ratios were mixed. The average contract rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 3.62 percent from 3.61 percent, with points, (which in all cases include the origination fee) increasing to 0.43 from 0.38. The contract interest rate for 30-year fixed mortgages has increased for five of the last six weeks. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages (FRM) with jumbo loan balances (greater than $417,500) decreased to 3.85 percent from 3.88 percent, with points decreasing to 0.34 from 0.38 and the effective rate decreased from last week.
The rate for 30-year FRM backed by the FHA increased to 3.40 percent with 0.53 point from 3.39 percent with 0.58 point. The effective rate decreased from the previous week.
The 15-year FRM rate decreased to 2.87 percent from 2.88 percent, with points increasing to 0.39 from 0.27 and the effective rate increased.
The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) decreased to 2.61 percent from 2.66 percent, with points decreasing to 0.32 from 0.34 and the effective rate was down. Applications for ARMs were up slightly to 4 percent of all applications.
Information on rates and application volume are derived from MBA's Weekly Mortgage Applications 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.
