Mortgage Applications, Rates Hit Summer Doldrums

by devteam July 22nd, 2015 | Share

With the distortions of the Independence Day holiday week and thernsubsequent week’s recovery now history mortgage application activity settledrndown.  Really settled down.  As measured by the Mortgage BankersrnAssociations Market Composite Index the volume of mortgage applications duringrnthe week ended July 17 barely stirred from their levels of the previousrnweek.  The index increased 0.1 percent onrna seasonally adjusted basis and 0.4 percent when unadjusted.</p

The Refinance Index was up 1 percent from the week before and the sharernof refinancing applications dipped to 50.3 percent of all applications from 5.8rnpercent the week before.  Both the seasonallyrnadjusted and unadjusted Purchase Indices rose 1 percent from the previous weekrnand the unadjusted index was 18 percent higher than during the same week inrn2014. </p

Refinance Index vs 30 Yr Fixed</p

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


Purchase Index vs 30 Yr Fixed</p

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


The government share of mortgagernapplications rose slightly with applications for FHA mortgages increasing torn14.0 percent form 13.8 percent and those for VA mortgages up from 10.8 percentrnto 11.3 percent.  The USDA share ofrntotal applications was unchanged at 0.9 percent. </p

Like application volumes, interest rates</bduring the week were mixed and relatively flat. rnThe average contract interest rate for 30-year fixed-rate mortgagesrn(FRM) with conforming loan balances ($417,000 or less) remained unchanged atrn4.23 percent, with points decreasing to 0.34 from 0.39.  The effective raternwas down from the previous week.</p

Jumbo 30-year FRM (with balances greaterrnthan $417,000) had an average rate of 4.16 percent with 0.33 point.  During the week ended July 10 the rate wasrn4.20 percent with 0.28 point.  Therneffective rate for these loans declined week-over-week.   </p

Thirty-year FRM backed by the FHA had anrnaverage rate of 4.0 percent, a decrease of 2 basis points from the week before.  Points decreased to 0.17 from 0.26 and therneffective rate was also lower. </p

The average contract interest rate forrn15-year FRM was unchanged at 3.43 percent, with points increasing to 0.34 from 0.33.  The effective rate increased. </p

The average contract interest rate for 5/1rnadjustable rate mortgages (ARMs) decreased to 3.08 percent from 3.13 percentrnand points dipped to 0.41 from 0.42.  Therneffective rate decreased from the previous week.  The market share of ARMs eased from 7.4 torn7.3 percent of mortgage applications.</p

MBA’s Weekly Mortgage Applications survey,rnwhich has been conducted since 1990, covers over 75 percent of residentialrnmortgage applications.  Respondentsrninclude mortgage bankers, commercial banks and thrifts. Basernperiod and value for all indexes is March 16,rn1990=100 and interest rate information is based on loans with an 80rnpercent loan-to-value ratio with points that include the origination fee.

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About the Author


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

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