MBA: Mortgage Application Volume Rose 14.2%

Posted by Patrick Barnard on January 21, 2015 No Comments
Categories : Residential Mortgage

Mortgage application volume increased 14.2% on an adjusted basis during the week ended Jan. 16, compared to the previous week, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.

The news follows last week's announcement from the MBA that application volume skyrocketed more than 49% during the week ended Jan. 9.

On an unadjusted basis, volume was up 17% this past week.

Applications for refinances increased 22% compared to the previous week, due mainly to low interest rates. Applications for purchases, meanwhile, were down about 3%.

On an unadjusted basis, applications for purchases increased 3% compared with the previous week and were 3% higher compared to the same week one year ago.

The refinance share of mortgage activity increased to 74% of total applications, up from 71% the previous week to reach the highest level since May 2013.

Mortgage rates continued to fall during the week. As per the MBA's data, the average rate for a 30-year fixed-rate mortgage (FRM) with conforming loan balance ($417,000 or less) was 3.80%, down from 3.89% the previous week.

The average rate for a 30-year FRM with jumbo loan balance (greater than $417,000) was 3.86%, down from 3.88% to reach the lowest level since May 2013.

The average rate for a 30-year FRM backed by the Federal Housing Administration (FHA) was 3.66%, down from 3.71% to reach the lowest level since May 2013.

The average rate for a 15-year FRM was 3.10%, down from 3.16% to reach the lowest level since May 2013.

The average rate for a 5/1 adjustable-rate mortgage (ARM) was 2.87%, down from 2.94% to reach the lowest level since June 2013.

The ARM share of activity increased to 6.4% of total applications.

Looking at application volume by loan type, applications for mortgages backed by the FHA represented 8.0% of all applications, up from 7.5% the previous week. Applications for Veterans Affairs mortgages represented 9.4% of all loans, down from 9.7% the previous week. Applications for mortgages through the U.S. Department of Agriculture fell to 0.6% of all applications, down from 0.8% the previous week.

The survey covers over 75% of all U.S. retail residential mortgage applications.

‘Mortgage application volume increased last week to its highest level since June 2013, led by a 22 percent increase in refinance application volume,’ says Mike Fratantoni, MBA's chief economist, in a statement. ‘This increase was largely due to mortgage rates dropping to their lowest level since May 2013. However, the recent reduction in FHA mortgage insurance premiums also played a role: FHA refinance applications increased 57 percent last week. Even with this increase, refinances made up only 48 percent of FHA volume, compared to 73 percent for Veterans Affairs and 77 percent for conventional loans.’

‘Conventional purchase applications were down about 3 percent for the week on a seasonally adjusted basis, but up 5 percent relative to last year at this time,’ he adds. ‘FHA purchase applications were down 1 percent for the week on a seasonally adjusted basis.’

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