Mortgage Applications Decrease as Rates Jump in Latest MBA Weekly Survey

WASHINGTON, D.C. (June 5, 2013) — Mortgage applications decreased 11.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 31, 2013. This week’s results include an adjustment for the Memorial Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 11.5 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 20 percent compared with the previous week.  The Refinance Index decreased 15 percent from the previous week and is at its lowest level since the end of November 2011.  The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 13 percent compared with the previous week and was 14 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 68 percent of total applications from 71 percent the previous week, the lowest level since early July 2011. This is the fourth straight weekly decline for the refinance share. The adjustable-rate mortgage (ARM) share of activity increased to 6 percent of total applications. The HARP share of refinance applications has been unchanged at 32 percent for the past three weeks.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 4.07 percent, the highest rate since April 2012, from 3.90 percent, with points decreasing to 0.35 from  0.39 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  This was the largest single-week increase in this rate since the week ending July 1, 2011.  The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 4.20 percent, the highest rate since May 2012, from 4.07 percent, with points increasing to 0.28 from 0.27 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.76 percent, the highest rate since May 2012, from 3.62 percent, with points increasing to 0.32 from 0.27 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.23 percent, the highest rate since June 2012, from 3.10 percent, with points increasing to 0.38 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 2.76 percent, the highest rate since June 2012, from 2.60 percent, with points increasing to 0.41 from 0.24 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

If you would like to purchase a subscription of MBA’s Weekly Applications Survey, please visit www.mortgagebankers.org/WeeklyApps, contact mbaresearch@mortgagebankers.org or click here.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990.  Respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990=100.