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Mortgage Apps Move Upwards

Stable mortgage rates and an uptick in home listings is pushing mortgage loan applications. According to the latest weekly Mortgage Applications Survey released by the MBA, mortgage loan applications increased 2.5 percent from a week earlier. On an unadjusted basis, however, the Market Composite Index decreased 18 percent compared to the previous week.

Mortgage loan applications had shown a decline over the past two weeks and last week, apps declined despite a decrease in mortgage interest rates.

The seasonally adjusted purchase index also saw a rise, increasing 7 percent from the prior week. The refinance index, on the other hand, decreased to its lowest level since December 2000 to 4 percent. In fact, the refinance share of mortgage activity also fell to its lowest level since August 2008 to 34.8 percent of total applications. The refinance share of mortgage activity in the previous week was slightly higher at 37.2 percent. The survey found that the adjustable-rate mortgage (ARM) share of activity decreased to 6.3 percent of total applications.

Loan applications for FHA loans saw a slight dip from 10.2 percent in the prior week to 10 percent. The VA loans, though, saw a rise to 11.3 percent from 10.7 percent in the previous week. The USDA share of loan applications remained unchanged at 0.8 percent.

Here's how the average contract interest rate for various loan types performed in the last week:

  • The average contract interest rate for 5/1 ARMs increased to its highest level in the history of the survey to 4.13 percent from 4.03 percent in the prior week. The effective rate for these loans also increased.
  • For 30-year fixed-rate mortgages with conforming balances, interest rate decreased to 4.76 percent from 4.79 percent. The effective rate saw a decrease from last week.
  • The effective rate, as well as the interest rate, for 30-year fixed-rate loans with jumbo balances, decreased over last week from 4.71 percent to 4.68 percent.
  • The average rate for FHA-backed 30-year fixed-rate mortgages increased slightly to 4.80 percent from 4.78 percent, while the effective rate also increased from last week.
  • For 15-year fixed-rate mortgages, the average interest rate decreased to 4.18 percent from 4.22 percent.

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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