Refinancing Apps Rise on Record Low Rates

by devteam February 8th, 2012 | Share

Mortgagernrates broke another set of records during the week ended February 3,rnestablishing several new historic lows. rnIn response, the seasonally adjusted Mortgage Bankers Association’s (MBA)rnMarket Composite Index, a measure of mortgage application volume, rose 7.5rnpercent and 8.7 percent on an unadjusted basis. rn  </p

The increases wererndriven solely by refinancing which represented 80.5 percent of total applications for the week,rnup from 80.0 percent the previous week. rnThe Index measuring applications for refinancing increased 9.4 percent overrnthat of the week ended January 27 but the seasonally adjusted basis thernPurchase Index ticked up only 0.1 percent. The unadjusted Purchase Index was 6rnpercent higher than in the previous week and 4.1 percent lower than during thernsame week in 2011.  </p

The four-weekrnmoving averages for the seasonally adjusted Market and Purchase Indices were up 4.88 percent and 0.65 percent respectively andrnthe moving average for the Refinance Index rose 5.72 percent.  </p

Statistics for thernmonth of January indicate that investors played a slightly smaller part in thernpurchase mortgage market than in December with the investor share of applicationsrnfor home purchase at 6.4 percent compared to 6.9 percent in December.  Inrnaddition, the share of purchase mortgages for second homes increased to 5.9rnpercent in January from 5.4 percent in December.  The investor share of applications declinedrnin the West and East North Central regions. </p

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

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


Refinance Index vs 30 Yr Fixed</p

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


Both the averagerncontract interest rate and the effective rate for all types of mortgages withrnloan-to-value ratios of 80 percent declined for the week and all fixed-raternmortgages (FRM) reached new lows.  </p<ul class="unIndentedList"<liRates for 30-year FRM with onforming loan balances of $417,500rnor less decreased to 4.05 percent from 4.09 percent, with points increasing to 0.44 from 0.41 including thernorigination fee. </li<liJumbo 30-year FRM, those with loanrnbalances greaterrnthan $417,500, had averagesrnrates of 4.29 percent with .43 point compared to 4.33rnpercent with 0.41 point. </li<liThe rate for 30-year fixed-rate mortgages backed by thernFHA decreased to 3.89 percent from 3.96 percent, with points increasing to 0.78rnfrom 0.61. </li<liFifteen-year FRM had an averagernrate of 3.33 percent, down 3 basis points from the previous week and points decreased torn0.37 from 0.41. </li<liThe rate for 5/1 adjustable-rate mortgages (ARM) decreased torn2.91 percent from 2.94 percent, with points increasingrnto 0.40 from 0.39. The ARM share of mortgagernapplications was up to 6.0 percent from 5.6rnpercent the previous week.</li</ul

MBA’s WeeklyrnMortgage Applications Survey covers over 75 percent of all U.S. retailrnresidential mortgage applications, and has been conducted weekly sincern1990.  Respondents include mortgage bankers, commercial banks andrnthrifts.  Base 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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