Refinance Applications Drive Increase in MBA Weekly Survey

MBA NewsLink Staff 

February 17, 2016


The lowest interest rates in nearly a year triggered another surge in refinance applications, the Mortgage Bankers Association reported this morning in its Weekly Applications Survey for the week ending Feb. 12.

The Market Composite Index increased by 8.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 10 percent compared to the previous week.

The Refinance Index, Conventional Refinance Index and Government Refinance Index increased by 16 percent from the previous week, reaching their highest levels since January 2015. The refinance share of mortgage activity increased to its highest level since February 2015, 64.3 percent of total applications, from 61.2 percent the previous week.

The seasonally adjusted Purchase Index decreased by 4 percent from one week earlier. The unadjusted Purchase Index increased by 2 percent compared to the previous week and was 30 percent higher than the same week one year ago.

The FHA share of total applications decreased to 11.5 percent from 12.3 percent the week prior. The VA share of total applications increased to 11.7 percent from 11.1 percent the week prior. The USDA share of total applications remained unchanged from 0.6 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to its lowest level since April 2015, 3.83 percent, from 3.91 percent, with points decreasing to 0.36 from 0.41 (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 its lowest level since December 2012, 3.74 percent, from 3.76 percent, with points decreasing to 0.26 from 0.30 (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 its lowest level since April 2015, 3.67 percent, from 3.72 percent, with points increasing to 0.34 from 0.33 (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 its lowest level since April 2015, 3.11 percent, from 3.18 percent, with points decreasing to 0.31 from 0.38 (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 its lowest level since May 2015, 2.92 percent, from 2.96 percent, with points increasing to 0.32 from 0.30 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity increased to 6.7 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.

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