Mortgage Activity Rebounds from Tough Holiday Week

Mortgage applications rallied last week from the week ended September 6 in which applications were down 13.5 percent and refinancing applications fell 20 percent.  The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage application volume, rose 11.2 percent on a seasonally adjusted basis during the week ended September 13, driven by an 18 percent rebound in refinancing.  On an unadjusted basis the composite was up 23 percent from the previous week.

The previous week's numbers had included an adjustment for the Labor Day holiday, but even when this week is factored in, refinances are still down 3% from 2 weeks ago while purchases are unchanged.  This week, however, the seasonally adjusted Purchase Index increased 3 percent from the previous week and the unadjusted Purchasing Index rose 12 percent and was 1 percent higher than during the same time period in 2012.

Purchase Index vs 30 Yr Fixed

Refinancing applications represented 61 percent of applications during the week, up from 57 percent the previous week.  The Home Affordable Refinance Program (HARP) had a 40 percent share of mortgage applications, up from 38 percent and the highest share the program has enjoyed since MBA began tracking it early last year.

Refinance Index vs 30 Yr Fixed

Data from MBA's Weekly Mortgage Application Survey indicated that mortgage rates, both contract and effective, fell slightly during the week for loans with an 80 percent loan-to-value ratio. 

The average contract interest rate for the 30-year fixed-rate mortgage (FRM) with a conforming balance of $417,000 or less decreased from 4.80 with 0.46 point to 4.75 percent with 0.39 point.  Points included the origination fee.

The rate for a jumbo 30-year FRM with balances over $417,000 eased down 1 basis point to 4.83 percent.  Points decreased from 0.41 to 0.33.

Thirty-year FRM backed by the FHA had an average contract rate of 4.50 percent with 0.41 point.  The previous week the rate had been 4.56 percent with 0.28 point.

The average rate for a 15-year FRM was 3.81 percent with 0.34 point compared to a rate of 3.83 percent with 0.42 percent during the week ended September 6.

The share of applications for adjustable rate mortgages (ARM) inched up slightly to 7 percent.  The contract rate for the hybrid 5/1 ARM decreased 5 basis points to 3.54 percent with points remaining unchanged at 0.43 point.

MBA's survey covers of 75 percent of all U.S. retail residential mortgage applications and collects data from mortgage bankers, commercial banks, and thrifts.  The base period and value for all indexes is March 16, 1990=100.