Mortgage Applications Plunge as Rates Rise

Home loan activity plunged last week as mortgage rates pushed higher according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 6th, 2013.

The Market Composite Index, which measures mortgage loan application volume including purchase applications and refinance applications, fell 13.5 percent last week and follows a 1.3 percent increase the week before. This week’s survey includes an adjustment for the Labor Day holiday.

On an unadjusted basis, mortgage loan application volume fell 23 percent from the previous week after increasing by a modest 0.3 percent the week before.

Purchase Applications:

The seasonally adjusted Purchase Index fell by 2.7 percent after posting a 0.4 percent decline the week before. The unadjusted Purchase Index was 14 percent lower than the previous week but was still seven percent higher than during the same period last year.

Refinance Applications:

The Refinance Index fell by 28 percent from the previous week after increasing by two percent the week before. Refinance activity has slumped 71 percent since its high in May of this year and is at its lowest level since June of 2009. The refinance share of mortgage activity fell to 57 percent of total applications from 61 percent the week before.

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)

4.80

4.73

0.46

0.33

Increased

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

4.84

4.71

0.41

0.25

Increased

15-Year FRM

3.83

3.75

0.42

0.30

Increased

FHA 30-Year

4.56

4.48

0.28

0.03

Increased
5/1 ARM

3.59

3.49

0.43

0.37

Increased

 
The adjustable-rate mortgage (ARM) share of activity remained at just over seven percent of total applications.

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

Source:
Mortgage Bankers Association

Reported by Chris Moore