Refinancing still Dominates Application Volume

Refinancing remained strong relative to purchase mortgage activity during the week ended December 11 while application activity overall slipped.  The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage applications volume, dipped by 1.1 percent on a seasonally adjusted basis and was down 2.0 percent when unadjusted.

The share of mortgage applications intended for refinancing moved above 60 percent for the first time since early October probably due more to a decrease in purchase activity than the small gain for refinancing itself.  It moved to a 60.7 percent share from 58.7 the previous week and the Refinancing index was up 1 percent.  The seasonally adjusted Purchase Index fell 3 percent from the week ended December 4 and the unadjusted Purchase Index lost 7 percent.  The unadjusted Purchase Index was 34 percent higher than during the same week in 2014.

Refinance Index vs 30 Yr Fixed

Purchase Index vs 30 Yr Fixed

 The FHA share of total applications remained unchanged at 14.0 percent while the VA share increased to 11.2 percent from 10.8 percent. The USDA share of total applications decreased to 0.6 percent after being stuck at 0.7 percent for more than a month.

The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances ($417,000 or less) remained unchanged at 4.14 percent.  Points increased to 0.45 from 0.43 and the effective rate remained unchanged.

The rate for 30-year FRM with jumbo loan balances (greater than $417,000) slipped one basis point to 4.01 percent with points decreasing to 0.30 from 0.40. The effective rate decreased from the previous week.

The average contract interest rate for 30-year FRM backed by the FHA also decline by 1 basis point to 3.90 percent.  Points fell to 0.31 from 0.43 taking the effective rate lower.

The 15-year FRM had an average rate of 3.38 percent, down from 3.39 percent.  Points dropped from 0.39 to 0.35 and the effective rate eased back.

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) increased to 3.25 percent from 3.23 percent, with points increasing to 0.36 from 0.30.  The effective rate increased from last week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.0 percent of total applications.

MBA's Weekly Mortgage Application Survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100 and rate information presumes a loan with an 80 percent loan-to-value ratio and points that include the origination fee.