Mortgage Applications Decline as Interest Rates Edge Higher

January 25, 2012 (Chris Moore)

Mortgage applications for both purchases and refinances declined last week as mortgage rates edged higher according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 20, 2012.

The Market Composite Index, a measure of mortgage loan application volume, which includes purchase applications and refinance applications, decreased a seasonally adjusted 5.0 percent from the previous week. This week’s report includes an adjustment for the Martin Luther King holiday.

On an unadjusted basis, the Index decreased 13.8 percent from the previous week. The four week moving average for the seasonally adjusted Market Index is up 4.12 percent.

Purchase Applications:

The seasonally adjusted Purchase Index decreased 5.4 percent from the previous week. The four week moving average is up 0.47 percent for the adjusted Purchase Index.

The unadjusted Purchase Index decreased 9.7 percent compared with the previous week and was 6.5 percent lower than the same week a year ago.

Refinance Applications:

The Refinance Index decreased 5.2 percent from the previous week. The four week moving average for the Index is up 4.85 percent.

The refinance share of mortgage activity fell to 81.3 percent of total applications from 82.2 percent the previous week.

Mortgage Interest Rates:

Average Contract Mortgages Rates
(80% loan-to-value)

Type of
Loan

Interest Rate (%)

Points

Effective Rate

Current

Previous

Current

Previous

30-Year FRM Conforming
($417,500 or less)

4.11

4.06*

0.47

0.48

Increased

30-Year FRM Non-Conforming
($417,501 or more)

4.39

4.40

0.40

0.37

Decreased

15-Year FRM

3.40

3.33

0.40

0.37

Increased

FHA 30-Year

3.97

3.91*

0.57

0.59

Increased

5/1 ARM

2.91

2.90

0.41

0.45

Increased

*Survey record low

The adjustable-rate mortgage (ARM) share of activity decreased to 5.3 percent of total applications from 5.6 percent the previous week.

December Statistics:

Of the borrowers who refinanced their loans in December, 56.6 percent chose a 30-year fixed rate mortgage, 24.3 percent chose a 15-year fixed rate mortgage, 5.3 percent chose an ARM and 13.8 percent chose a fixed rate mortgage other than a 30-year or a 15-year fixed rate mortgage.

Tags: MBA, home purchase applications, mortgage rates, fixed rate mortgage, adjustable rate mortgage, refinance, interest rate

Sources:
Mortgage Bankers Association