Post-Holiday Mortgage Applications Jump 12.8%

by devteam December 7th, 2011 | Share

Mortgagernapplication volume jumped back after the shortened Thanksgiving holiday week withrnactivity rising 12.8 percent on a seasonally adjusted basis and 60.2 percent onrnan unadjusted basis than during the week ended November 25.  Figures from the Mortgage Bankers Association’srn(MBA) Weekly Mortgage Applications Survey for the week ended December 2 werernreleased this morning. </p

ThernRefinance component of the Market Composite Index figures referenced above increasedrn15.3 percent from the previous week and the seasonally adjusted Purchase Index</bwas up 8.3 percent to its highest level since August 5.  The unadjusted Purchase Index increased 47.2rnpercent compared with the previous short week and was 0.8 percent lower than onernyear earlier. </p

The four-weekrnmoving average for the seasonally adjusted Market Index was down 3.20 percentrnand the Refinance Index was down 5.13 percent. rnThe moving average for the seasonally adjusted Purchase Index rose 3.33rnpercent.</p

Refinancingrnactivity rose to 76.0 percent of application volume from 73.9 percent thernprevious week and the share of applications for adjustable rate mortgages (ARM)rndecreased one basis point to 5.7 percent.</p

“Coming outrnof the Thanksgiving holiday, applications increased significantly as mortgagernrates dropped to their lowest levels in about two months,” said MichaelrnFratantoni, MBA’s Vice President of Research and Economics. “Inrnparticular, refinance applications increased sharply, with some lenders seeingrnrefinance volume double. Despite this surge, aggregate refinance activity isrnstill below levels reported two weeks ago. Some lenders indicated they arernbeginning to see an increase in HARP loans, but that increase is still a smallrnportion of the move this week.”</p

During the month of November 2011 52.9rnpercent of borrowers who were refinancing chose fixed rate 30-year mortgagesrn(FRM) and 26.2 chose FRM with 15-year terms. rnOnly 5.8 percent applied for ARMs. rnFixed-rate loans with amortization schedules on other than 15- or 30-yearrnschedules attracted 15.1 percent of refinancing applications.  The demand for ARM and 15-year FRM fellrnduring November while the share of 30-year and “other” types of loansrnincreased. Applicants for purchase mortgages overwhelmingly (85.5 percent)rnchose 30-year FRM while 6.8 percent opted for 15-year FRM and 5.9 percent, forrnARMs.  </p

Hybrid ARMs werernthe only loans for which interest rates increased during the week.  The average contract rate for a 5/1 ARM wasrn3.01 percent with 0.54 point, up from 2.98 percent with 0.47 point the previousrnweek.  The effective rate also increased.</p

Purchase Index vs 30 Yr Fixed</b</p

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


Refinance Index vs 30 Yr Fixed</p

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


Interest rates forrnall fixed-rate loan products decreased as did their effective rate.  The rate for 30-year FRM with conforming loan balances ($417,500 orrnless)decreased to 4.18 percent from 4.21 percent which was the lowest rate since Septemberrn30.  Points decreased to 0.48 fro 0.49.  Ratesrnfor jumbo loans (balances over $417,500) fell to their lowest rates sincernSeptember 30, 4.52 percent compared to 4.55 percent the previous week.  Points increased to 0.47 from 0.45.</p

Thirty-year FRMrnbacked by FHA had an average rate of 3.98 percent, down two basis points forrnthe week and the lowest rate since January. rnPoints decreased to 0.52 from 0.62. The average contract interest rate forrn15-year fixed-rate mortgages decreased to 3.53 percent from 3.58rnpercent, with points unchanged at 0.45.</p

All rates arernquoted for loans with an 80 percent loan-to-value ratio and points include thernorigination fee.</p

MBA’s Weekly Application Survey covers over 75 percent of all U.S.rnretail residential mortgage applications, and has been conducted weekly sincern1990. Respondents include mortgage bankers, commercial banks and thrifts. rnBase period and value for all indexes is March 16, 1990=100.

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.

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