Refinancing Resumes in Post Holiday Week, Up 6%

Refinancing accounted for much of the increase in mortgage application activity during the week ended November 30 and the share of that refinancing done through the Home Affordable Refinancing Program (HARP) also increased.   Overall mortgage application volume as measured by the Mortgage Bankers Association's (MBA) Mortgage Composite Index rose 4.5 percent on a seasonally adjusted basis and the Refinance Index was up 6 percent.

On an unadjusted basis the index increased 49 percent from the week ended November 23.  That week was shortened by Thanksgiving and the seasonally adjusted number that week included an adjustment to account for the holiday.   The seasonally adjusted Purchase Index increased 0.1 percent from a week earlier and the unadjusted Index was up 36 percent from Thanksgiving week and was 0.1 percent lower than during the same week one year earlier.

Refinancing represented an 83 percent share of all applications; up from 81 percent the previous week and 27 percent of refinancing applications were for HARP loans compared to 26 percent one week earlier.

Purchase Index vs 30 Yr Fixed

Refinance Index vs 30 Yr Fixed

Mortgage interest rates were mixed during the week.  The average contract rate for 30-year fixed-rate mortgages (FRM) with conventional balances (under $417,500) decreased by one basis point to 3.52 percent matching a previous low while points increased from 0.40 to 0.41.  The effective rate decreased.  The jumbo version of the 30-year FRM (balances above $417,500) had a slightly higher contract rate than the previous week, 3.79 percent with 0.32 point compared to 3.75 percent with 0.31 point and the effective rate increased.

The average contract interest rate for 30-year FRM backed by the FHA decreased to 3.34 percent, matching the lowest rate in the history of the survey, from 3.36 percent, with points decreasing to 0.62 from 0.65 and the effective rate decreased.

Rates for 15-year FRM decreased to 2.86 percent, the lowest rate ever tracked by MBA, from 2.89 percent, with points decreasing to 0.27 from 0.35 and the effective rate decreased. 

Adjustable rate mortgages garnered only a three percent share of mortgage applications during the week, down from 4 percent a week earlier. The average contract interest rate for 5/1 ARMs increased to 2.62 percent from 2.60 percent, with points increasing to 0.40 from 0.37 and the effective rate increased.

Contract interest rates are based on loans with an 80 percent loan-to-value ratio and points include the origination fee.  MBA's Weekly Mortgage Applications Survey from which this data is derived 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.