Applications Fall 5% during Holiday Shortened Week

Mortgage applications were down during the week ended January 20 according to the Weekly Mortgage Applications Survey conducted by the Mortgage Bankers Association (MBA).  The Market Composite Index, a measure of application volume fell 5 percent on a basis that was adjusted seasonally and to account for the week shortened by the Martin Luther King holiday.  On a non-seasonally adjusted basis the Composite fell 13.8 percent from the previous week which ended January 13.

The seasonally adjusted Purchase Index was down 5.4 percent and the unadjusted Purchase Index 9.7 percent.  The latter was 6.5 percent lower than during the same week in 2011.  The index measuring applications for refinancing was down 5.2 percent. 

The four week moving averages for all indices remained positive.  The Composite Index was up 4.12 percent, the Refinance Index increased 4.85 percent and the seasonally adjusted Purchase Index rose 0.47 percent.

Refinancing continued to represent the majority of mortgage activity, falling slightly from 82.2 percent of all applications the previous week to 81.3 percent.  Applications for adjustable rate mortgages were at a 5.3 percent level compared to 5.6 percent a week earlier. 

Looking back at the month of December, MBA found that refinancing borrowers applied for 30-year fixed-rate mortgages (FRM) in 56.6 percent of cases and 24.3 percent of applications were for a 15-year FRM.   ARMs represented 5.3 percent of applications in December.  The share of refinance applications for "other" fixed-rate mortgages with amortization schedules other than a 15 or a 30-year term was 13.8 percent of all refinance applications.

Purchase Index vs 30 Yr Fixed

Refinance Index vs 30 Yr Fixed

The average contract interest rate for 30-year FRMs with conforming loan balances of $417,500 or less increased to 4.11 percent from 4.06 percent with points down one basis point to 0.47 point.  The effective rate increased from the previous week.  The rate for jumbo 30-year FRM with balances over $417,500 decreased from 4.40 percent with 0.37 point to 4.39 percent with 0.40 point.  The effective rate also decreased.  The rate for FHA-backed 30-year FRM rose to 3.97 percent from 3.91 percent while points were down from 0.59 to 0.57 point.  The effective rate increased.

The average rate for 15-year FRM increased to 3.40 percent from 3.33 percent, with points increasing to 0.40 from 0.39 and the effective rate increased as well. The rate for the 5/1 hybrid ARM was up one basis point to 2.91 percent with points decreasing to 0.41l from 0.45.  The effective rate increased.

All rates quoted are for 80 percent loan-to-value mortgages and points include the application fee.

 The MBA survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990.  Respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990=100.