Mortgage Application Volume Dips Again as Rates Move to Five Month Highs

Mortgage application volume dropped again during the week ended February 15.  The Mortgage Bankers Association reported this morning that its Market Composite Index, a measure of that volume, decreased 1.7 percent on a seasonally adjusted basis and 1 percent unadjusted compared to the week ended February 8.

The Refinance Index was down 2 percent and the refinancing share of application activity fell from 78 to 77 percent, the lowest level since last May.  The seasonally adjusted Purchase Index decreased 2 percent from the previous week but increased 3 percent on an unadjusted basis and was 17 percent higher than during the same week in 2012.

Purchase Index vs 30 Yr Fixed

Refinance Index vs 30 Yr Fixed

The average contract interest rate for a 30-year fixed-rate mortgage (FRM) with a conforming balance of $417,500 or less increased for the ninth time in ten weeks.  The rate was 3.78 percent with 0.40 point compared to 3.75 percent with 0.43 point and the effective rate increased. This was the highest rate since August.

The contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 3.94 percent with 0.40 point from 3.98 percent with 0.36 point. The effective rate decreased from the previous week.

FHA-backed 30-year FRM had an average rate of 3.54 percent with 0.40 point, the highest rate since August, and the effective rate increased.  The rate the previous week was 3.53 percent with 0.39 point.  

The rate for 15-year FRM, 3.03 percent with 0.38 point was the highest since last September.  The rate the previous week was 3.01 percent with 0.28 point and the effective rate increased week-over-week.

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) remained unchanged at 2.66 percent, with points increasing to 0.32 from 0.31 and the effective rate increased.  The ARM share of activity increased to 4 percent of total applications.

Rates quoted are for loans with 80 percent loan to value ratios.  Points include the origination fee. 

MBA's volume indices are derived from a weekly survey of mortgage bankers, commercial banks and thrifts that it has conducted since 1990.  Base period and value for all indexes is March 16, 1990=100.