Refinance Applications Drop Despite Lower Rates
While applications for purchase mortgages rosernslightly during the week ended August 24 it wasn’t enough to compensate for therndrop in refinancing applications. ThernMortgage Bankers Association’s (MBA) Market Composite Index, a measure of loanrnapplication volume during the week, was down a seasonally adjusted 4.3 percent fromrnone week earlier and 5 percent on an unadjusted basis.</p
The decrease was driven by a 6 percent drop in thernRefinance Index to the lowest level since early May. The seasonally adjusted Purchase Index rose 1rnpercent from the week ended August 17 but was down 1 percent adjusted. Refinancing made up 79 percent of loanrnapplications compared to 80 percent the previous week. </p
Purchase Index vs 30 Yr Fixed</b</p
Refinance Index vs 30 Yr Fixed</p
All interest rates, both contract and effective, wererndown from a week earlier. The average contract rate for 30-year fixed-raternmortgages (FRM) with conforming balances of $417,500 or less was 3.80 percentrncompared to 3.86 percent the previous week. rnPoints were unchanged at 0.42. rnThe jumbo 30-year FRM (loans balances over $417,500) decreased to 4.06rnpercent with 0.34 point from 4.11 percent with 0.42 point.</p
FHA-backed 30-year FRM had an average rate of 3.60rnpercent with 0.48 point. Both rate andrnpoints were two basis points lower than the previous week. </p
The average contract interest rate for 15-year fixed-raternmortgages decreased to 3.12 percent from 3.15 percent, with points remaining unchanged at 0.44</p
Applications for adjustable rate mortgages (ARMs) had a 4rnpercent share of the market during the week. rnThe rate for 5/l hybrid adjustable mortgages fell from 2.74 percent withrn0.38 point to 2.68 percent with 0.36 point, the lowest rate for this type ofrnloan since MBA began to track it. </p
All rates quoted by MBA are for loans with an 80 percentrnloan-to-value ratio and points include the origination fee. Rates are derived from a weekly survey ofrnmortgage bankers, commercial banks and thrifts which has been conducted sincern1990. The survey covers over 75 percentrnof all U.S. retail residential mortgage applications. Base period and value for all indexes isrnMarch 16, 1990=100.
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