Mortgage applications increased 0.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Jan. 31, 2014. The Market Composite Index, a measure of mortgage loan application volume, increased 0.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 14 percent compared with the previous week. The Refinance Index increased three percent from the previous week. The seasonally adjusted Purchase Index decreased four percent from one week earlier. The unadjusted Purchase Index increased 14 percent compared with the previous week and was 17 percent lower than the same week one year ago.
The refinance share of mortgage activity remained unchanged at 62 percent of total applications from the previous week. The adjustable-rate mortgage (ARM) share of activity increased to eight percent of total applications. The average contract rate declined for all loan products in the survey. Contract rates were at their lowest level since November 2013, except for the 5/1 ARM, which was at the lowest level since December 2013.
“January was great for bond prices and mortgage-backed securities, and thus we saw mortgage rates continue to drop at the close of the month," said Quicken Loans Vice President Bill Banfield. "Believe it or not, there are still millions of folks out there who could benefit from refinancing, and the uptick in refinance volume from lower rates shows us that.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.47 percent from 4.52 percent, with points decreasing to 0.25 from 0.40 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.42 percent from 4.47 percent, with points decreasing to 0.11 from 0.27 (including the origination fee) for 80 percent LTVs. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.12 percent from 4.18 percent, with points decreasing to 0.15 from 0.33 (including the origination fee) for 80 percent LTVs. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.53 percent from 3.59 percent, with points increasing to 0.28 from 0.26 (including the origination fee) for 80 percent LTVs. The effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs decreased to 3.15 percent from 3.25 percent, with points increasing to 0.41 from 0.33 (including the origination fee) for 80 percent LTVs. The effective rate decreased from last week.
