Mortgage Applications Lowest Since 2000

 

Apr 30 2014, 7:55AM

 

The week ended April 25 was one of the slowest for mortgage application activity the industry has seen in years.  The Mortgage Bankers Association (MBA) said applications for both purchase mortgages and refinancing decreased and its Market Composite Index, a measure of overall mortgage applications volume, fell to its lowest level in almost 15 years.

 

The Composite decreased 5.9 percent on a seasonally adjusted basis from the week ended April 18 and was down 5 percent on a non-seasonally adjusted basis.  Refinancing activity fell 7 percent and purchase applications were off 4 percent from a week earlier on both a seasonally adjusted and an unadjusted basis and was 21 percent lower than during the same week in 2013.

 

Refinancing fell to exactly half of all mortgage applications from 51 percent the previous week.  This is the lowest share for refinancing since July 2009 and it is 13 percentage points below the level at the beginning of 2014.

 

Refinance Index vs 30 Yr Fixed

 

Purchase Index vs 30 Yr Fixed

 

“Both purchase and refinance application activity fell last week, and the market composite index is at its lowest level since December 2000,” said Mike Fratantoni, MBA’s Chief Economist. “Purchase applications decreased 4 percent over the week, and were 21 percent lower than a year ago. Refinance activity also continued to slide despite a 30-year fixed rate that was unchanged from the previous week. The refinance index dropped 7 percent to the lowest level since 2008, continuing the declining trend that we have seen since May 2013.”

 

Contract interest rates for fixed rate mortgages were lower or unchanged from the previous week while effective rates all decreased.  Interest rates for 5/1 adjustable rate mortgages did increase during the week with the average contract rate rising 10 basis points to 3.26 percent.  Points decreased to 0.35 from 0.36 and the effective rate decreased from the previous week.  Approximately 8 percent of mortgage applications were for the various adjustable rate products, essentially unchanged from the previous week.

 

The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances of $417,000 or less was unchanged at 4.49 percent, with points decreasing to 0.38 from 0.50.  The average contract interest rate for jumbo 30-year fixed-rate mortgages with balances greater than $417,000 decreased to 4.37 percent from 4.41 percent, with points dropping to 0.14 from 0.34.

 

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.17 percent from 4.20 percent with points decreasing to 0.10 from 0.41 and the rate for 15-year fixed-rate mortgages decreased to 3.53 percent from 3.55 percent.  Points for the 15-year decreased to 0.31 from 0.33.

 

MBA’s data is derived from its Weekly Mortgage Applications Survey which it has conducted since 1990 and which covers over 75 percent of all U.S. retail residential mortgage applications.  Survey respondents include mortgage bankers, commercial banks and thrifts.  Interest rate information is based on loans with an 80 percent loan-to-value ratio and points include the origination fee.  Base period and value for all indexes is March 16, 1990=100.

 

Full Work Week and Rate Rally Boost Mortgage Apps

 

Mar 5 2014, 8:45AM

The volume of mortgage applications increased during the week ended February 28 for the first time since late January.  This good news was muted slightly by the fact that the previous week had been a holiday for many with government offices and schools closed.

The Mortgage Bankers Association said its Market Composite Index increased 9.4 percent on a seasonally adjusted basis from the week ended February 21 and 11 percent on an unadjusted basis.  The seasonally adjusted Purchase Index was 9 percent higher than the previous week but MBA noted that week was not adjusted to account for the President’s Day holiday.  The seasonally adjusted Purchase Index during the most recent week was 6 percent above the level during the last non-holiday week which ended February 14.  The unadjusted Purchase Index was 19 percent lower than during the same week in 2013.

Purchase Index vs 30 Yr Fixed

The Refinance Index was up 10 percent from the holiday week but was 3 percent lower than two weeks earlier.  Refinancing had a market share of 57.7 percent compared to 58 percent the previous week, the lowest since last September.

Refinance Index vs 30 Yr Fixed

Both average contract and effective rates decreased last week for all mortgage products.  The average contract interest rate for a 30-year fixed-rate mortgage (FRM) with a conforming loan balance of $417,000 or less decreased to 4.47 percent with 0.28 point.  The previous week the rate was 4.53 percent with 0.31 point.

Jumbo 30-year FRM (loan balances in excess of $417,000) had an average rate of 4.37 percent, 10 basis points below the average rate the previous week.  Points increased to 0.20 from 0.13.

Thirty-year FRM carrying FHA guarantees had an average rate of 4.13 percent with 0.13 point.  The previous week the average rate was 4.17 percent with 0.20 point.

The rate for 15-year FRM was 3.52 percent, down 4 basis points from the previous week.  Points decreased to 0.18 from 0.28.

Adjustable rate mortgages (ARM) held at an 8 percent share of mortgage applications for the fifth straight week.  The contract rate for the most widely offered ARM, the 5/1 hybrid, was 3.09 percent with 0.38 point.  The rate the previous week was 3.17 percent with 0.31 point.

MBA’s Weekly Mortgage Application Survey has been conducted since 1990.  It surveys mortgage bankers, commercial banks, and thrifts and covers over 75 percent of U.S. retail residential mortgage applications.  Base period and value for all indexes is March 16, 1990.  Interest rates are quoted for 80 percent loan-to-value ratio loans and points include the origination fee.


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