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Mortgage Applications Retreat after One Week Rally
Last week’s rally inrnmortgage application activity was just that, last week’s. The Mortgage Bankers Association (MBS) saidrntoday that the number of applications for both refinancing and purchasernmortgages fell during the week ended September 19, erasing many of the gainsrnmade during the week ended September 12.</p
The MBA’s MarketrnComposite Index, a measure of mortgage application volume, was down 4.1 percent</bon a seasonally adjusted basis compared to the previous week. On an unadjusted basis the decrease was 5.0rnpercent.</p
The Refinance Indexrnfell 7 percent from the previous week. Fifty-sixrnpercent of all mortgage applications made during the week were for refinancing. The previous week the share was 57 percent. </p
Purchase Index vs 30 Yr Fixed</b</p
ChartManager.loadChart(‘purchaseappschart’, ‘PurchaseMtgAppChart’);
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Applications forrnmortgages to purchase a home pulled back to a lesser extent. The seasonally adjusted Purchase Index wasrn0.3 percent below the level of the previous week while the unadjusted PurchasernIndex was 2 percent lower than a week earlier and was down 16 percent from thernsame week in 2013.</p
Refinance Index vs 30 Yr Fixed</p
ChartManager.loadChart(‘refiappschart’, ‘RefiMtgAppChart’);
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There were slightrnincreases in the contract interest rate for all mortgage products and therneffective rate increased for all but the 15 year fixed-rate mortgagern(FRM). The average contract rate for thern30-year FRM with conforming loan balances ($417,000 or less) was 4.39 percent,rnthe highest rate since May 2014, up from 4.36 percent the previous week. Points increased to 0.35 from 0.20.</p
There was a six basisrnpoint gain in the jumbo 30-year FRM (loan balances over $417,000) to 4.30rnpercent. Points increased from 0.16 torn0.22.</p
Thirty-year FRM backedrnby the FHA rose to 4.08 percent with 0.09 point from 4.03 with 0.05 point. This rate was the highest for an FHArnguaranteed loan since May.</p
The rate for 15-year</bFRM was unchanged at 3.56 percent. rnPoints increased from 0.25 to 0.26.</p
The adjustable-rate mortgagern(ARM) share of mortgagernapplications increased from 7.6 percent of all applications to 8.0 percent. The contract interest rate for 5/1 ARMs rosern1 basis points to 3.20 percent with points increasing to 0.40 from 0.29. </p
MBA’srnapplication and interest rate information is derived from its Weekly MortgagernApplication Survey which it has conducted since 1990. The survey covers over 75 percent of thernretail residential market with respondents including mortgage bankers,rncommercial banks, and thrifts. Interestrnrates assume a mortgage with an 80 percent loan-to-value ratio and pointsrninclude the origination fee.
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About the Author
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Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.
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