Refinance Application Volume Plummets To Five-Year Low

Posted by Patrick Barnard on December 24, 2013 No Comments
Categories : Residential Mortgage

14789_178440305 Refinance Application Volume Plummets To Five-Year Low Mortgage applications decreased 6.3% from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending Dec. 20.

The Market Composite Index, a measure of mortgage loan application volume, decreased 6.3% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 7% compared with the previous week.

The Refinance Index decreased 8% from the previous week. The seasonally adjusted Purchase Index decreased 4% from one week earlier. The unadjusted Purchase Index decreased 5% compared with the previous week and was 11% lower than the same week one year ago.

"Following the Federal Reserve's taper announcement, mortgage application volume dropped again last week, with rates increasing and refinance application volume falling to its lowest level since November 2008," said Mike Fratantoni, vice president of research and economics for the MBA.

"Purchase application volume was weak, too, continuing to run more than 10 percent below last year's pace," he continues. "Notably, government purchase application volume is almost 25 percent below where it was at this time last year, with the larger drop compared to conventional purchase likely due to the increase in Federal Housing Administration (FHA) premiums over the course of the year."

The refinance share of mortgage activity decreased to 65% of total applications, from 66% the previous week. The adjustable-rate mortgage (ARM) share of activity rose to 8.3%of total applications – the highest level since July 2008.

The effective rate increased from last week for all of the following, according to the MBA:

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.64% – the highest level since September – from 4.62%, with points increasing to 0.41 from 0.38 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.63% – the highest level since September – from 4.61%, with points remained unchanged at 0.24 (including the origination fee) for 80% LTV loans.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.29% from 4.25%, with points decreasing to 0.24 from 0.32 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.74% – the highest level since September – from 3.66%, with points decreasing to 0.29 from 0.35 (including the origination fee) for 80% LTV loans.

The average contract interest rate for 5/1 ARMs increased to 3.26% – the highest level since September – from 3.20%, with points decreasing to 0.39 from 0.42 (including the origination fee) for 80% LTV loans.

Register here to receive our Latest Headlines email newsletter




Leave a Comment