Refinance Applications Drive MBA Weekly Survey Increase

MBA NewsLink Staff 

April 06, 2016


Mortgage applications increased last week from one week earlier on the strength of refinancing activity, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending April 1.

The Market Composite Index increased by 2.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 3 percent compared to the previous week.

Refinancings drove the increase. The Refinance Index increased by 7 percent from the previous week. The refinance share of mortgage activity increased to 54.5 percent of total applications from 52.4 percent the previous week.

The seasonally adjusted Purchase Index decreased by 2 percent from one week earlier. The unadjusted Purchase Index decreased by 2 percent compared to the previous week and was 11 percent higher than the same week one year ago.

The FHA share of total applications decreased to 11.3 percent from 11.5 percent the week prior. The VA share of total applications decreased to 12.2 percent from 12.9 percent the week prior. The USDA share of total applications decreased to 0.8 percent from 0.9 percent the week prior.

"Rates fell last week as a more cautious message from Federal Reserve Chair Janet Yellen about the economic outlook and continuing concerns about weaker growth abroad kept demand for U.S. Treasuries high," said Joel Kan, MBA associate vice president of economic forecasting. "The 30-year fixed mortgage rate dropped 8 basis points, the largest single week decline in eight weeks, and that helped to push refinance applications up almost 7 percent. This was the first increase in refinance activity after six weeks of declines. Applications for conventional refinance loans increased around 9 percent while applications for government refinance loans were essentially unchanged."

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.86 percent from 3.94 percent, with points decreasing to 0.32 from 0.36 (including origination fee) for 80 percent loan-to-value ratio 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 3.76 percent from 3.82 percent, with points decreasing to 0.27 from 0.28 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by FHA decreased to 3.73 percent from 3.76 percent, with points increasing to 0.36 from 0.30 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.10 percent from 3.19 percent, with points increasing to 0.37 from 0.30 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 adjustable-rate mortgages decreased to 2.94 percent from 3.07 percent, with points decreasing to 0.26 from 0.38 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity decreased to 4.7 percent of total applications.

The survey covers more than 75 percent of all U.S. retail and consumer direct residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.

Share this article