Refinancing Applications Surge as MBA's Average Rates Hit New 2011 Lows

by devteam December 14th, 2011 | Share

Buoyedrnby a surge in refinancing, the Market Composite Index issued weekly by thernMortgage Bankers Association (MBA) increased by 4.1 percent on a seasonallyrnadjusted basis during the week ended December 9.  The increase on a non-adjusted basis was 4.2rnpercent.  The Refinancing Index portion ofrnthe Composite increased by 9.3 percent to reach the highest level in over arnmonth. </p

Thernseasonally adjusted Purchase Index was down 8.2 percent from the week endedrnDecember 2, and the unadjusted  PurchasernIndex dropped down 11.8 percent week-over-week and was 4.3 percent lower thanrnduring the same week in 2010.</p

Thernfour week moving average for all three indices rose during the week; thernseasonally adjusted Market Index 0.65 percent, the seasonally adjusted PurchasernIndex 1.55 percent, and the Refinance Index 0.69 percent.</p

The refinancernshare of mortgage activity increased to 79.7 percent of total applications from 76.0 percent the previous week; the highestrnrefinance share this year. The adjustable-rate mortgage (ARM) share of activity decreased to 5.6rnpercent from 5.7 percent of total applicationsrnfrom the previous week.</p

Looking back atrnthe monthly totals for November, MBA found that purchase applications were downrncompared to October in all loan categories except for the largest loan amounts,rnthose over $729,000 which increased 1.9 percent.  The change in application volumernyear-over-year was mixed.  </p<table border="1" cellpadding="4" cellspacing="0"<tbody<tr<td valign="top" width="156"

Loan Category</p</td<td valign="top" width="138"

Change from Oct.</p</td<td valign="top" width="156"

Change from Nov. 2010</p</td</tr<tr<td valign="top" width="156"

Under $150,000</p</td<td valign="top" width="138"

-10.7</p</td<td valign="top" width="156"

+9.8</p</td</tr<tr<td valign="top" width="156"

$150,000 -rn $300,000</p</td<td valign="top" width="138"

-8.9</p</td<td valign="top" width="156"

-1.2</p</td</tr<tr<td valign="top" width="156"

$300,000 -rn $417,000</p</td<td valign="top" width="138"

-8.6</p</td<td valign="top" width="156"

-9.8</p</td</tr<tr<td valign="top" width="156"

$417,000 -rn $625,000</p</td<td valign="top" width="138"

-6.0</p</td<td valign="top" width="156"

+0.6</p</td</tr<tr<td valign="top" width="156"

$625,000 -rn $729,000</p</td<td valign="top" width="138"

-5.2</p</td<td valign="top" width="156"

-20.2</p</td</tr<tr<td valign="top" width="156"

Over $729,000</p</td<td valign="top" width="138"

+1.9</p</td<td valign="top" width="156"


Interest rates</adecreased across all loan products with most establishing new 2011 lows.  The 30-year fixed rate mortgage (FRM) with arnconforming balance (under $417,500) had an average contract interest rate ofrn4.12 percent, down from 4.18 percent the previous week with points decreasingrnto 0.45 from 0.48.  Loan with a non-conforming or jumbo balance, i.e. overrn$417,500, decreased from 4.52 percent with 0.47 point to 4.47 percent with 0.45rnpoint, the lowest rate so far this year. rnThe effective rate for both conforming and jumbo loans also decreased.</p

A 30-year FRMrnbacked by FHA had a rate of 3.94 percent with 0.68 point compared to 3.98 percentrnwith 0.52 point.  This latest rate is thernlowest for FHA loans this year.  Therneffective rate increased.</p

A new low wasrnreached by the 15-year FRM as well with the average decreasing to 3.44 percentrnwith 0.52 point from 3.53 percent with 0.45 point. The effective rate also decreased from last week. </p

The average raternfor  5/2 ARMs fell to 2.93 percent, thernlowest rate of the year, from 3.01 percent. rnPoints also decreased to 0.53 from 0.54 and the effective rate decreased</p

All interest ratesrnquoted are for loans with a 80 percent loan to value ratio and all pointsrninclude the origination fee.  The MBArnweekly survey covers 75 percent of all retail residential mortgage applications.  Respondents include mortgage bankers,rncommercial banks, and thrifts.</p


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


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