The Mortgage Bankers Association's (MBA) Market Composite Index notched another decline during the week ended July 11, the fifth straight down week for the index which measures the volume of mortgage applications. The index decreased 3.6 percent on a seasonally adjusted basis from the week ended July 4. The prior week's numbers included an adjustment for the July 4 holiday. On an unadjusted basis the index was up 20 percent from the previous week, rebounding from the 19 point loss of the short holiday week.
The Refinance Index was 0.1 percent below that of the previous week and the refinance share of mortgage application activity rose to 54 percent from 52 percent the previous week.
Refinance Index vs 30 Yr Fixed
The seasonally adjusted Purchase Index was down 8 percent to its lowest level since February while unadjusted the index was up 16 percent week over week but was 17 percent lower than during the same week in 2013. Loans for purchasing purposes averaged $268,500, the lowest amount since February.
Purchase Index vs 30 Yr Fixed
Interest rates were mixed during the week. The average contract rate for 30-year fixed rate mortgages (FRM) with conforming loan balances of $417,000 or less was one basis point higher than during the previous week at 4.33 percent. Points increased to 0.20 from 0.16 and the effective rate increased.
The contract rate for a jumbo 30-year FRM with principal balances in excess of $417,500 went down one basis point, from 4.24 percent to 4.23 percent. Points increased from 0.16 to 0.26 and the effective interest rate was up.
Thirty-year FRM backed by FHA had an average interest rate of 4.04 percent with 0.02 point compared to 4.02 percent with -0.03 point the previous week. The effective rate increased.
The average contract interest rate for 15-year FRM increased to 3.41 percent from 3.40 percent, with points increasing to 0.23 from 0.22. The effective rate increased from last week.
Adjustable rate mortgages (ARMs) held steady at an 8 percent market share. The average contract interest rate for 5/1 ARMs decreased to 3.17 percent from 3.24 percent, with points increasing to 0.34 from 0.31 and the effective rate decreased.
MBA's data is derived from its Weekly Mortgage Applications Survey which it has conducted since 1990. The survey covers over 75 percent of all U.S. retail residential mortgage applications, and respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100 and interest rate information assumes loans with an 80 percent loan to value ratio. Points include the origination fee.