Applications for mortgages rose significantly during the week ended January 15 as fixed rate mortgage interest rates fell to the lowest levels since mid-autumn. The Mortgage Bankers Association (MBA) reported that its Market Composite Index, a measure of loan application volume rose 9.0 percent during the week on an adjusted basis and 12 percent unadjusted.
Compared to the week ended January 8 the Refinance Index was up 19 percent and the share of all mortgage applications that were intended for refinancing jumped from 55.8 percent to 59.1 percent. Purchase mortgage applications increased 2 percent on their adjusted index and 4 percent unadjusted. The unadjusted index was 17 percent higher than during the same week in 2015.
Refinance Index vs 30 Yr Fixed
Purchase Index vs 30 Yr Fixed
Applications for FHA backed mortgages decreased from 14.4 percent to 13.7 percent week-over-week and the VA share declined from 12.2 percent to 10.8 percent. Applications for USDA mortgages eased by 0.1 percent to 0.7 percent.
Effective rates for mortgages fell across the board while adjustable rate mortgages (ARMs) were the only products to see an increase in contract rates. The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances ($417,000 or less) dropped to the lowest level since October 2015, 4.06 percent, while points increased to 0.41. The previous week the rate was 4.12 percent with 0.38 point.
Jumbo mortgages, those with balances greater the $417,000, had an average contract rate of 3.93 percent, the lowest rate since the previous October, down from 4.02 percent a week earlier. Points eased to 030 from 0.31.
Thirty-year FRM backed by the FHA had an average rate of 3.86 percent compared to 3.90 percent the previous week. Points rose to 0.36 from 0.34. The contract rate was the lowest since October 2015.
The average contract interest rate for 15-year fixed-rate mortgages was also at the lowest rate since October, 3.29 percent, down 3 basis points from the prior week. Points were unchanged at 0.39.
The average contract interest rate for 5/1 ARMs increased to 3.20 percent from 3.14 percent, with points decreasing to 0.18 from 0.42. Sox percent of applications were for ARMs compared to 5.1 percent the week before.
MBS's Weekly Mortgage Applications Survey has been conducted since 1990. The survey covers over 75 percent of all U.S. retail residential mortgage applications with respondents that include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100 and rate data is based on loans with an 80 percent loan to value ratio and points that include the origination fee.