Refinancing extended its comeback during the week ended October 11, rising to a 66 percent share of all mortgage applications reported by the Mortgage Bankers Association (MBA) from its Weekly Mortgage Applications Survey. MBA said the increased market share, up from 64 percent the previous week, was due in part to the impact of the government shutdown on home purchases.
The Market Composite Index, a measure of all application activity, increased 0.3 percent on a seasonally adjusted basis and 0.4 on an unadjusted basis from the index for the week ended October 4. The small increase was driven by refinancing which increased 3 percent from the previous week overcoming a 5 percent decrease in both the adjusted and unadjusted Purchase Index. The unadjusted Purchase Index was 1 percent lower than during the same week in 2012.
Mike Fratantoni, MBA's Vice President of Research and Economics said, "The government shutdown had a notable impact on the mortgage market last week. Purchase applications for government programs dropped by more than 7 percent over the week to their lowest level since December 2007, and the government share of purchase applications dropped to its lowest level in almost three years. Conventional purchase applications dropped as well, but not to the same extent, falling almost 4 percent for the week."
Purchase Index vs 30 Yr Fixed
Refinance Index vs 30 Yr Fixed
The average contract interest rate for 30-year fixed rate mortgages (FRM) with conforming loan balances of $417,000 or less increased to 4.46 percent from 4.42 percent. Points decreased to 0.31 from 0.44 and the effective rate rose.
The jumbo 30-year FRM (balances greater than $417,000) had an average contract rate of 4.51 percent with 0.15 point compared to 4.45 percent with 0.21 point the week before. The effective rate also increased.
Contract and effective rates for FHA-backed 30-year FRM both increased, The contract rate rose 1 basis point to 4.16 percent and points increased from 0.37 to 0.44
Fifteen-year FRM had an average rate of 3.53 percent with 0.31 point compared to 3.52 with 0.34 point the previous week.
Adjustable rate mortgages (ARM) had a 6 percent market share during the week. The average contract interest rate for 5/1 ARMs remained unchanged at 3.25 percent, with points increasing to 0.32 from 0.29.
Rates quoted are for mortgages with 80 percent loan-to-value ratios. Points include the origination fee.
MBA's survey covers over 75 percent of all U.S. retail residential mortgage applications, and 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.
