Mortgage Applications Slow as Average Rates Rise

Mortgage applications decreased during the week ended February 17 according to the Weekly Mortgage Applications Survey released this morning by the Mortgage Bankers Association (MBA),   The Market Composite Index measuring the volume of applications decreased 4.5 percent on a seasonally adjusted basis and 3.6 percent unadjusted from the week ended February 10.

The Refinancing Index declined 4.8 percent while the volume of applications for home purchases decreased 2.9 percent on a seasonal adjusted basis.  The unadjusted Purchase Index was 1.4 percent lower than the week before and down 9.2 percent from the same week in 2011.  Applications for refinancing composed 80.1 percent of all applications compared to 81.1 percent the previous week.

The four week moving average of the seasonally adjusted Market Composite Index slipped by 0.30 percent, and the moving average for the seasonally adjusted Purchase Index was down 3.1 percent.  The moving average of the Refinance Index rose 0.33 percent. 

Purchase Index vs 30 Yr Fixed

Refinance Index vs 30 Yr Fixed

The average contract interest rate for conforming (balances under $417,500) 30-year fixed-rate mortgages (FRM) increased one basis point to 4.09 percent with points increasing from 0.51 to 0.53 point.  The effective rate also increased from the previous week.  Rates for jumbo 30-year mortgages with balances over $417,500 averaged 4.32 percent with 0.42 point compared to 4.30 percent with 0.44 point a week before. The effective rate decreased.  FHA-backed 30-year FRM rates were unchanged at 3.87 percent with points dropping from 0.78 to 0.41.  The effective rate decreased.

Average rates for 15-year FRM increased to 3.38 percent with 0.37 point from 3.33 percent with 0.40 point and the effective rate also increased.

Rates for hybrid 5/1 adjustable rate mortgages (ARMs) increased one basis point to 2.94 percent and points increased to 0.44 from 0.42.  The effective rate also increased.  Applications for ARMs as a share of all mortgage applications declined slightly from 5.4 percent to 5.3 percent.

The preceding rate information is for 80 percent loan-to-value mortgages and points quoted include the origination fee.

During the month of January 57.2 percent of applications for refinancing were for 30-year FRM mortgages, 24.4 percent were for 15 year FRM and 5.5 percent were seeking ARMS.  The percentage of applications in all three categories increased from December figures.  Applications for mortgages with amortization schedules other than 30-year or 15-year terms constituted 12.9 percent of refinance applications, lower than in December.

MBA's weekly 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.