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Mortgage Apps Decline Despite Stable Rates

Applications for mortgage loans declined 0.4 percent during the week according to the latest Weekly Mortgage Applications Survey by MBA. The Market Composite Index remained unchanged on an unadjusted basis from the prior week. The Purchase Index decreased 0.2 percent on an adjusted basis and increased 0.4 percent compared with the previous week on an unadjusted basis. The Purchase Index was 3 percent higher than the same week last year, the survey revealed.

The Refinance Index decreased 1 percent from the week earlier reaching its lowest level since October 2008, the survey indicated. The refinance share of mortgage activity also decreased to 36.3 percent of total applications, reaching its lowest level since 2008. The refinance share was 36.5 percent of total mortgage activity last week.

The share of government loan applications, except for VA loans also decreased during the week. The FHA share of total applications decreased to 10.1 percent from 10.3 percent last week, while the USDA share of loan applications, after remaining unchanged for most of last month, decreased to 0.7 percent from 0.8 percent. The VA share of loan applications increased slightly from 10.2 percent last week to 10.4 percent.

Here's how the average contract interest rate for various loans performed during the week:

  • The effective rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less), decreased from last week with the rate decreasing to 4.78 percent from 4.8 percent, with points decreasing to 0.50 from 0.53 for 80 percent loan-to-value ratio (LTV) loans.
  • The rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) decreased to 4.65 percent from 4.69 percent. The points for these loans decreased from 0.42 to 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate decreased.
  • For FHA-backed 30-year fixed-rate mortgages the rate decreased slightly to 4.80 percent from 4.81 percent, with effective rate decreasing from last week. Points also decreased to 0.75 from 0.78 (including the origination fee) for 80 percent LTV loans.
  • The rate for 15-year fixed-rate mortgages decreased to 4.20 percent from 4.21 percent, as did the effective rate, with points decreasing to 0.48 from 0.49 (including the origination fee) for 80 percent LTV loans.
  • For 5/1 ARMs the rate decreased to 4 percent from 4.03 percent, with points decreasing to 0.43 from 0.44 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

About Author: Radhika Ojha

Radhika Ojha, Online Editor at the Five Star Institute, is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her master’s degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Dallas, Texas. You can contact her at Radhika.Ojha@theMReport.com.

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