The evolution of the Mortgage Bankers Association’s (MBA) Market Composite Index is the measure that serves to determine mortgage application activity. Figures indicate that there was a 14% increase in the week ended January 24, and only a 0.4% budge in the week ended January 31.
The level of refinancing remained at 62% of the total number of mortgages whereas there was a 3% increase in the Refinancing Index. The Purchase Index (which is subject to seasonal adjustment) went down with 4.0% from the previous week level while the unadjusted index gained 14% from week to week. As compared to the same week, in 2013, the unadjusted index was 17% lower.
Lower rates comparable to the November 2013 levels!
The median contract interest rate for conventional fixed-rate mortgages (FRM) with 30-year extent and balances of $417,000 or less was 4.47%, with 0.25 point lower than the previous week’s rates, which averaged 4.52%. In comparison with the previous week, the effective rate not only for FRM but for all other products was lower.
The average rate for the jumbo 30-year fixed-rate mortgage (balances above $417,000) dropped from 4.47% to an average rate of 4.42%, with a decrease of 0.16 points (from 0.27 to 0.11).
For 30-year fixed-rate mortgages backed by the FHA, there was a drop from 4.18% (0.33 points) to 4.12% (0.15).
For 15-year fixed-rate mortgages, rates lost 6 basis points and reached 3.53%. There was an increase in points from 0.26 to 0.28.
The weekly evolution for adjustable rate mortgage products (ARMs) was marked by a 1% increase from 7% to 8%. The average contract rate for the most popular of the adjustable rate mortgages (5/1 ARM), declined from 3.25% to 3.15%, with points increasing to 0.41 from 0.33. This decrease made the 5/1 hybrid reach the levels of December 2013 again.
All the data provided by the MBA is gathered via the Weekly Mortgage Application Survey that is conducted on commercial banks, thrifts and mortgage bankers that cover 75% of all the U.S. Retail home loan applications. The survey has been in place since 1990, and the base period and value for its indexes is March 16, 1990 = 100. The points include the origination fees and the quoted interest rates apply to mortgages with 80% loan-to-value ratio.