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Economic News

Mortgage application volume jumps in first week of 2013

Even accounting for the holidays, mortgage application volume rose substantially in the first week of the year, and while many readings are below pre-holiday levels, they are up compared to this time last year.

mortgage application volume

mortgage application volume

Mortgage application volume increased

According to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 4, 2013, mortgage application volume increased 11.7 percent from the previous week, including an adjustment to account for the holiday.

The Market Composite Index rose 11.7 percent on a seasonally adjusted basis from one week earlier, but jumped 49 percent compared with the previous week on an unadjusted basis. The Refinance Index increased 12 percent from the previous week, but up only 1.0 percent compared to two weeks ago, prior to the holidays.

The seasonally adjusted Purchase Index increased 10 percent from one week earlier, while the unadjusted Purchase Index also increased 49 percent compared with the previous week. This reading is 8.0 percent lower than the same week one year ago, and 2.0 percent lower than two weeks ago, prior to the holidays.

The refinance share of mortgage activity remained constant at 82 percent of total applications from the previous week. The adjustable-rate mortgage (ARM) share of activity was unchanged at 3 percent of total applications. The HARP share of refinance applications decreased to 25 percent from 27 percent the prior week.

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Mortgage application volume and interest rates

According to the MBA:

  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 3.61 percent from 3.52 percent, with points decreasing to 0.41 from 0.48 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week. This rate is at its highest level since the first week of November 2012.
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 3.78 percent from 3.75 percent, with points increasing to 0.38 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.35 percent from 3.34 percent, with points increasing to 0.69 from 0.61 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
  • The average contract interest rate for 15-year fixed-rate mortgages increased to 2.88 percent from 2.86 percent, with points increasing to 0.39 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
  • The average contract interest rate for 5/1 ARMs decreased to 2.64 percent from 2.65 percent, with points decreasing to 0.37 from 0.42 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

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