Mortgage Refinance Applications Jump in Response to New Low Rates

July 19, 2012 (Chris Moore)

Mortgage applications increased last week as another round of new record low rates finally spurred a jump in refinance applications according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 13th, 2012.

The Market Composite Index, a measure of mortgage loan application volume including purchase applications and refinance applications, increased a seasonally adjusted 16.9 percent from the previous week and follows a 2.1 percent decline last week.

On an unadjusted basis, the Index increased by 46 percent from the previous week due to the Fourth of July holiday the week before.

Purchase Applications:

The seasonally adjusted Purchase Index fell 0.01 percent from the previous week, after increasing about three percent the week before.

The unadjusted Purchase Index increased by just over 25 percent compared to the previous week, also due to the Fourth of July holiday, and was three percent lower than the same week one year ago.

Refinance Applications:

The Refinance Index increased 22 percent from the previous week. The refinance share of mortgage activity increased to 80.1 percent of total applications from 77 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)

3.74*

3.79

0.45

0.36

Decreased

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

3.98*

4.05

0.32

0.34

Decreased

15-Year FRM

3.12*

3.15

0.48

0.43

Decreased

FHA 30-Year

3.55*

3.63

0.44

0.36

Decreased

5/1 ARM

2.71*

2.71*

0.51

0.36

Increased

*Record Survey Low

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

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

Sources:
Mortgage Bankers Association