Mortgage

Mortgage applications surge 11.6% on lower rates

Refis jump 23%; refi share is 65% of apps

Mortgage applications increased 11.6% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending October 17, 2014.

This week’s results did not include an adjustment for the Columbus Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 11.6% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 12% compared with the previous week. The Refinance Index increased 23% from the previous week to the highest level since November 2013. The seasonally adjusted Purchase Index decreased 5% from one week earlier. The unadjusted Purchase Index decreased 5% compared with the previous week and was 9% lower than the same week one year ago.

“Continuing concerns about weak economic growth in Europe and a few US economic indicators that came in below expectations caused a flight to quality into US Treasuries last week, leading to sharp drops in interest rates,” said Mike Fratantoni, MBA’s Chief Economist. “Mortgage rates have fallen close to 30 basis points over the last four weeks. Refinance application volume reached the highest level since November 2013 as a result, and the average loan balance for refinance applications increased to $306,400, the highest level in the survey’s history.”

The refinance share of mortgage activity increased to 65% of total applications, the highest level since December 2013, from 59% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 9.4% of total applications, the highest level since June 2008.

The FHA share of total applications decreased from 9.5% last week to 8.3% this week. The VA share of total applications increased from 8.8% last week to 9.6% this week. The USDA share of total applications fell from 1.0% last week to 0.8% this week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.10%, the lowest level since May 2013, from 4.20%, with points increasing to 0.21 from 0.17 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.03%, the lowest level since May 2013, from 4.14%, with points increasing to 0.20 from 0.10 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.81%, the lowest level since June 2013, from 3.90%, with points decreasing to 0.07 from 0.08 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.28%, the lowest level since May 2013, from 3.41%, with points decreasing to 0.22 from 0.28 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.94%, the lowest level since June 2013, from 3.05%, with points decreasing to 0.37 from 0.38 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

Most Popular Articles

The housing market faced uncertainty in March, but now ‘it’s a circus’

The housing market faced a lot of uncertainty when COVID-19 caused the real estate industry to pause under shut-downs, but low interest rates and the desire for more space have turned this year into a boom time for real estate agents.

Oct 21, 2020 By

Latest Articles

The housing bubble boys blew it in 2020

The NAR existing home sales report released today blew out all estimates with 6,540,000 in existing home sales. This epic headline punctured any 2020 bubbles the housing bubble boys had left in their arsenal. But before we get too excited, keep in mind we are still down 0.2% year to date compared to 2019 levels. Still, this seems like a booming housing market, right?

Oct 22, 2020 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please