The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications this morning, noting a rise of 12.5% in the group’s seasonally adjusted composite index, compared with last week’s decrease of 5%. Unadjusted, the composite index rose by 12%.
Applications for refinancing rose 13% (seasonally adjusted), while seasonally adjusted purchase applications increased by 11% from the previous week. Unadjusted, the purchase index rose by 8% compared with the previous week and rose 22% compared with the same week a year ago.
This week’s report is very strong, and an MBA executive explains why:
Following the decrease in applications two weeks ago due to the effects of superstorm Sandy, mortgage applications in many East Coast states rebounded strongly this week. Application volume in New Jersey more than doubled over the week, while volume in Connecticut and New York increased more than 60 percent. In addition to the rebound in the states impacted by the storm, the 30 year fixed mortgage rate reached a new record low in the survey.
The refinancing rate rose a point to 81% of total applications. About 96% of the applications were seeking fixed-rate loans, consistent with last week’s reading.
The average contract interest rate for a conforming 30-year fixed-rate mortgage dropped from 3.61% to 3.52%. The rate for a jumbo 30-year fixed-rate mortgage also fell, from 3.88% to 3.83%. The average interest rate for a 15-year fixed-rate mortgage fell from 2.95% to 2.88%.
The contract interest rate for a 5/1 adjustable rate mortgage fell from 2.61% to 2.60%.
The burst of mortgage applications, especially for home purchases tied to rebuilding after Hurricane Sandy, will not last for long, but it gives a nice boost to the mortgage markets in one of their slowest periods of the year.