Drop in Refinancing Curtails Application Volume
The Mortgage Composite Index, a measure of loan applicationrnvolume, was down 6.7 percent on a seasonally adjusted basis and 6.6 percentrnunadjusted during the week ended June 29 compared to the week ended Junern22. The Mortgage Bankers Associationrn(MBA) released the Composite and other results of its weekly MortgagernApplications Survey this morning.</p
The decrease in mortgage volume was attributed to a drop ofrn8 percent in the Refinance Index which was in turn driven by a drop inrnapplications for government-backed refinancing loans. The share of refinancing applications was 78rnpercent of all applications, down one percentage point from the previousrnweek. Applications for HARP refinancingrnwhich is available only to current Freddie Mac and Fannie Mae borrowers have representedrna quarter of all refinancing applications for the last two weeks. </p
The seasonally adjusted Purchase Index was up one percentrnfrom the previous week. The unadjustedrnPurchase Index rose only slightly from the previous week and was down 7 percentrnfrom the same week in 2011. </p
Purchase Index vs 30 Yr Fixed</b</p
Refinance Index vs 30 Yr Fixed</p
Both the contract interest rate and the effective rate forrnall loan types decreased during the week and several rates hit new all timernlows. The average contract rate for 30-year fixedrnrate mortgages (FRM) with conforming balances ($417,500 or less) decreased torn3.86 percent with 0.41 point from 3.88 percent with 0.40 percent, the lowestrnrate for those loans since MBA began tracking them. </p
Jumbo 30-year FRM (balances over $417,500) dropped fourrnbasis points to 4.08 percent with points up to 0.38 from 0.35. This was the second lowest jumbo loan rate inrnMBA’s history. </p
FHA-backed 30-year FRM also set a new benchmark low with anrnaverage rate of 3.69 percent with 0.46 point compared to 3.71 percent with 0.46rnpoint. </p
Fifteen-year FRMs set a new low at 3.20 percent with 0.47rnpoint. The rate the previous week wasrn3.24 percent with 0.44 point.</p
The average 5/1 adjustable rate mortgage (ARM) rate fell to 2.76rnpercent with 0.45 point, down from 2.81 percent with 0.41 point. Applications for ARMs represented only 4rnpercent of all mortgage applications.</p
All rate quotes are for loans with an 80 percentrnloan-to-value ratio and points include the application fee. </p
The MBA’s weekly survey coversrnover 75 percent of all U.S. retail residential mortgage applications, and hasrnbeen conducted weekly since 1990. Respondents include mortgage bankers,rncommercial banks and thrifts. Base period and value for all indexes isrnMarch 16, 1990=100.
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