Lower Rates Stoked Modest Refi Demand Last Week

by devteam August 5th, 2015 | Share

Last week was the bestrnone for mortgage applications in quite some time in terms of percent gains versus the previous week (outright index levels remain generally depressed, especially in the Refi Index).  The Mortgage BankersrnAssociations Market Composite Index, a measure of application volume, rose 4.7rnpercent during the week ended July 31 on a seasonally adjusted basis.  Unadjusted it was up 5.0 percent.  </p

The Refinance Index increased 6 percent from the previous weekrnand the refinance share of mortgagernactivity rose to 51.3 percent from 50.6 percent. Both the seasonally adjusted and unadjustedrnPurchase Index were 3 percent above the previous week’s level.  The unadjusted PurchasernIndex was up 23 percentrncompared to the same week in 2014.  Itrnwas the largest year-over-year gain sincernthe 35 percent posted during the week ended November. 22, 2013, a weekrndistorted by the Thanksgiving holiday.</p

Refinance Index vs 30 Yr Fixed</p

ChartManager.loadChart(‘refiappschart’, ‘RefiMtgAppChart’);


Purchase Index vs 30 Yr Fixed</p

ChartManager.loadChart(‘purchaseappschart’, ‘PurchaseMtgAppChart’);


“Despite recent concerns about therneconomy, both purchase and refinance applications increased strongly inrnresponse to lower interest rates last week,” said Lynn Fisher, MBA’s VicernPresident of Research and Economics. “Refinance activity was the highestrnsince May when rates were last at this level. The increase in purchase activity wasrnalso notable for this time of year,<bup 23 percent relative to a year ago.”</p

The share of all applications that werernfor FHA-backed loans increased to 13.8 percent from 13.7 percent while the VA sharerndecreased to 10.5 percent from 10.9 percent. The share of USDA loan applicationsrndipped 0.1 percent to 0.9 percent.</p

As MBA’s Fisher said, the increased loan applicationrnactivity was in reaction to further reductions in mortgage interest rates.  Contract rates were down for all tracked loanrnproducts, some to the lowest levels since May, and effective rates declined forrnthose with fixed rates. </p

The average contract interest rate forrn30-year fixed-rate mortgages (FRM) with conforming loan balances ($417,000 or less) decreased to 4.13 percent,rnthe lowest level since May 2015, from 4.17 percent.  Points declined to .34 from 0.36.</p

Jumbo 30-year FRM with jumbornloan balances (greater thanrn$417,000) had an average rate of 4.08 percent, also the lowest level since Mayrn2015, compared to 4.12 percent the previous week.  Points fell to 0.27 from 0.35. </p

FHA-backed 30-year FRM contract ratesrnaveraged 3.96 percent with fromrn3.98 percent, with points easing back to 0.22 from 0.26.  </p

The average contract interest rate forrn15-year FRM decreased by 3 basis points to 3.36 percent, another three monthrnlow. Points were at 0.37 compared to 0.38 the prior week. </p

The average contractrninterest rate for 5/1rnadjustable rate mortgages (ARMs) also dropped to its lowest level since May,rn3.02 percent, from 3.04 percent.  Points rosernto 0.43 from 0.37rnleaving the effective rate unchanged. The ARM share of applications increasedrnto 6.8 percent from 6.6 percent. </p

MBA derives application volume and rate informationrnfrom its Weekly Mortgage Application Survey which covers over 75 percentrnof all U.S. retail residential mortgage applications.  The survey has been conducted since 1990rnamong respondents including mortgage bankers, commercial banks and thrifts. Basernperiod and value for all indexes is March 16,rn1990=100.  Interest raterninformation presumes loans with 80 percent loan-to-value ratios and pointsrninclude the origination fee.

All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of is prohibited.

About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

See all blogs


Leave a Comment

Leave a Reply

Latest Articles

Real Estate Investors Skip Paying Loans While Raising Billions

By John Gittelsohn August 24, 2020, 4:00 AM PDT Some of the largest real estate investors are walking away from Read More...

Late-Stage Delinquencies are Surging

Aug 21 2020, 11:59AM Like the report from Black Knight earlier today, the second quarter National Delinquency Survey from the Read More...

Published by the Federal Reserve Bank of San Francisco

It was recently published by the Federal Reserve Bank of San Francisco, which is about as official as you can Read More...