Mortgage Lending News

Mortgage Applications Decrease in MBA Weekly Survey

February 25, 2016 Posted by admin

For the week ending February 19th, the Mortgage Bankers Association reported in its Weekly Mortgage Applications Survey that mortgage applications decreased 4.3 percent on a seasonally adjusted basis from the previous week. On an unadjusted basis, the Index decreased by 12 percent.

The Refinance Index decreased 8 percent from the previous week. The refinance share of mortgage activity decreased to 61 percent of total applications from 64.3 percent the previous week.

“Following six straight weeks where rates declined a total of almost 40 basis points, rates ticked up slightly last week, causing some pull back in refinance activity,” MBA Chief Economist Mike Fratantoni told CNBC. “The dollar volume of refinance applications decreased by 26 percent, while refinance applications based on loan count decreased 17 percent, indicating that the volume of larger loans dropped to a greater extent than smaller loans. The average loan balance declined about 10 percent across all refinance loans.”

Fratantoni noted another change in the market: “for the second time in over a year, the VA share of applications at 13 percent exceeded the FHA share at 12 percent,” he said.

VA refinance volume increased for the week, while FHA refinance volume decreased. Last week the VA’s share at 11.7 percent exceeded FHA’s share at 11.5 percent, Fratantoni said.

The seasonally adjusted Purchase Index increased by 2 percent from one week earlier and the unadjusted Purchase Index decreased by 4 percent compared to the previous week and was 27 percent higher than the same week one year ago.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.85 percent from 3.83 percent, with points increasing to 0.42 (including origination fee) for 80 percent loan-to-value ratio loans from 0.36. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 3.80 percent from 3.74 percent, with points decreasing to 0.25 from 0.26 (including 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 FHA increased to 3.72 percent from 3.67 percent, with points increasing to 0.45 from 0.34 (including 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 3.12 percent from 3.11 percent, with points increasing to 0.40 from 0.31 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 adjustable-rate mortgages increased to 3.07 percent from 2.92 percent, with points decreasing to 0.30 from 0.32 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity decreased to 5.8 percent of total applications.

The survey covers more than 75 percent of all U.S. retail and consumer direct residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.

TOPICS: MBA mortgage lending refinance FHA mortgage applications

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