Mortgage application volume drops. Again.
When looking at all mortgage application volume, the Refinance Index continues to drag down the overall average which includes the Purchase Index. According to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 31, 2013, with an adjustment for the Memorial Day holiday, mortgage applications decreased 11.5 percent from the week prior as the volume continues to slide.
The bad news is that on an unadjusted basis, the overall Index decreased 20 percent compared with the previous week and the Refinance Index fell 15 percent, hitting its lowest level since November 2011.
The good news is that although the Purchase Index fell 2.0 percent on a seasonally adjusted basis, it is actually up 14 percent compared to the same week one year ago.
The MBA reports that the refinance share of all mortgage activity fell to 68 percent of total applications from 71 percent the week prior, marking its lowest level since July 2011 and the fourth consecutive week of decline. For most of 2012, the refinance share hovered around 80 to 81 percent of all mortgage activity, so this dip is substantial.
Average contract 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 4.07 percent, the highest rate since April 2012, from 3.90 percent, with points decreasing to 0.35 from 0.39 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. This was the largest single-week increase in this rate since the week ending July 1, 2011. The effective rate increased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 4.20 percent, the highest rate since May 2012, from 4.07 percent, with points increasing to 0.28 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 30-year fixed-rate mortgages backed by the FHA increased to 3.76 percent, the highest rate since May 2012, from 3.62 percent, with points increasing to 0.32 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 15-year fixed-rate mortgages increased to 3.23 percent, the highest rate since June 2012, from 3.10 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 5/1 ARMs increased to 2.76 percent, the highest rate since June 2012, from 2.60 percent, with points increasing to 0.41 from 0.24 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
