The Mortgage Bankers Association today released its weekly survey on mortgage applications, noting that total volume fell by -7.1% on both a seasonally adjusted and unadjusted basis. The refinance index fell by -8% and the seasonally adjusted purchase index fell by -1%. On an unadjusted basis, the purchase index fell by -2% and is now about -3% lower than the same week a year ago.
The large drop-off in refinancings is attributed to a change in the Federal Housing Administration’s rules:
Refinance volume fell last week due largely to a fall-off in refinance applications for government loans, which had more than doubled the prior week. The large swings in activity were due to the implementation of FHA’s new premiums on streamline refinances, and borrowers timing their applications to lower their premiums.
The average contract interest on a 30-year fixed-rate conforming loan rose slightly from 3.87% to 3.88%. On a 30-year fixed-rate jumbo loan, the average contract interest rate rose from 4.06% to 4.12%. The average rate on a 15-year fixed-rate loan fell from 3.25% to 3.24% and the average rate for a 5/1 adjustable-rate loan rose from 2.75% to 2.81%.
The purchase index continues to move sideways, which is decent news, and low interest rates should continue to encourage refinancings. There’s nothing in this week’s report that runs counter to other news on the housing front.