Mortgage applications decreased 5.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 25, 2014. The Market Composite Index, a measure of mortgage loan application volume, decreased 5.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week. The Refinance Index decreased seven percent from the previous week. The seasonally adjusted Purchase Index decreased four percent from one week earlier. The unadjusted Purchase Index decreased four percent compared with the previous week and was 21 percent lower than the same week one year ago.
“Both purchase and refinance application activity fell last week, and the market composite index is at its lowest level since December 2000,” said Mike Fratantoni, MBA’s chief economist. “Purchase applications decreased four percent over the week, and were 21 percent lower than a year ago. Refinance activity also continued to slide despite a 30-year fixed rate that was unchanged from the previous week. The refinance index dropped seven percent to the lowest level since 2008, continuing the declining trend that we have seen since May 2013.”
The refinance share of mortgage activity decreased to 50 percent of total applications from 51 percent the previous week. The refinance share is at its lowest level since July 2009. The adjustable-rate mortgage (ARM) share of activity remained unchanged at eight percent of total applications.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) remained unchanged at 4.49 percent, with points decreasing to 0.38 from 0.50 (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 4.37 percent from 4.41 percent, with points decreasing to 0.14 from 0.34 (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 4.17 percent from 4.20 percent, with points decreasing to 0.10 from 0.41 (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 3.55 percent, with points decreasing to 0.31 from 0.33 (including the origination fee) for 80 percent LTVs. The effective rate decreased from last week.
“The drop in applications was disappointing because with interest rates steadily improving recently, it suggests a reluctance of homebuyers to take action," Quicken Loans vice president Bill Banfield said. "However, consumers in the market for a home may find it easier than they thought to purchase, with the added bonus of interest rates near historic lows.”
The average contract interest rate for 5/1 ARMs increased to 3.26 percent from 3.16 percent, with points decreasing to 0.35 from 0.36 (including the origination fee) for 80 percent LTVs. The effective rate increased from last week.
