FHA/VA Boosts Otherwise Flat Mortgage Apps

There was virtually nornmovement last week in the various indices measuring mortgage applicationrnvolume.  The Mortgage Bankers Association’srn(MBA’s) Market Composite Index, a gauge of overall application activity, ekedrnout a 0.2 percent increase during the week ended August 21 while the unadjustedrnindex declined by 1.0 percent. </p

The Refinance Index alsornlost ground compared to the previous week, down 1.0 percent. The refinancernshare of total mortgage applications dipped from 55.5 percent during the weekrnended August 14 to 55.3 percent.  </p

The seasonallyrnadjusted Purchase Index did stir a bit, rising 2.0 percent but on an unadjustedrnbasis the Purchase Index was down 0.3 percent week-over-week while remaining 18rnpercent higher than it was during the same period in 2014.</p

Refinance Index vs 30 Yr Fixed</p

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Purchase Index vs 30 Yr Fixed</p

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The minimal increasernin the Market Composite Index was driven by an uptick in applications forrngovernment-backed mortgages while conventional purchase applications werernessentially unchanged.  The seasonallyrnadjusted FHA purchase index rose 5.6 percent while the index for VArnapplications increased by 5.2 percent. rnThe share of FHA applications inched up to 13.1 percent from 12.9rnpercent and the VA share from 11.1 percent to 11.4 percent.  The USDA application share was unchanged atrn0.8 percent of the total.</p

With the exception of arnslight increase for FHA-backed mortgages, interest rates, both contract andrneffective, declined during the week.  Therncontract interest rate for FHA 30-year fixed-rate mortgages (FRM) increasedrnfrom 3.88 percent with 0.17 point to 3.90 percent with 0.21 point.  The effective rate also increased.</p

The average rate for<b30-year FRM with conforming loan balances of $417,000 or less was 4.08 percent,rna 3 basis point decrease from the previous week.  Points declined to 0.36, from 0.37.</p

The jumbo 30-yearrnFRM, loans with balances over $417,000, had a contract rate of 4.0 percent withrn0.24 point.  The previous week the raternwas 4.03 percent with 0.29 point.</p

Fifteenrnyear-FRM rates fell 4 basis points to an average of 3.33 percent.  Points averaged 0.31 compared to 0.36.</p

The share of applications that were forrnadjustable rate mortgages (ARMs) ticked down from 6.9 percent to 6.8.  The average contract interest rate for 5/1rnARMs dipped to 2.96 percent from 2.98 percent, and points decreased to 0.36rnfrom 0.40.</p

MBA’s Weekly Mortgage Application Survey,rnwhich has been conducted since 1990, covers over 75 percent of all U.S. retailrnresidential mortgage applications. Respondents include mortgage bankers,rncommercial banks and thrifts. Base period and value for all indexes is Marchrn16, 1990=100.  Interest rate data assumes loans with 80rnpercent loan-to-value ratios with points that include the origination fee.

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