Hurricane Sandy caused a steep 5% drop in mortgage applications for the week ending Nov. 2, an industry trade group said.
Closed financial firms and borrower difficulties on the East Coast slowed both refinancing and purchase activity, the Mortgage Bankers Association said. The home purchase index alone fell 7% from the previous week, while the refinance index declined 5%.
"Last week’s storm had a significant impact on application volumes on the East Coast," said Mike Fratantoni, MBA’s vice president of research and economics. "Applications fell more than 60% compared to the prior week in New Jersey, almost 50% in New York and nearly 40% in Connecticut. Other East Coast states also saw declines over the week, while many states in other parts of the country had increases in application volumes."
The 30-year, FRM with a conforming loan balance fell 3.61% from 3.65% a week earlier, while the 30-year, FRM jumbo loan's average interest rate fell to 3.88% from 3.94%.
The 30-year, FRM backed by the FHA also edged down to 3.37% from 3.41%. In addition, the 15-year, FRM remained unchanged at 2.95%. The average contract interest rate for the 5/1 ARM declined to 2.61% from 2.6%.