Refinance Applications Fall to Lowest Level in Over a Month in Latest MBA Weekly Survey

Washington, D.C.—Mortgage applications decreased 12.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 14, 2012.

The Market Composite Index, a measure of mortgage loan application volume, decreased 12.3 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 13 percent compared with the previous week.  The Refinance Index decreased 14 percent from the previous week to the lowest level since week ending November 2, 2012.  The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index decreased 8 percent compared with the previous week and was 9 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 83 percent of total applications from 84 percent the previous week. The HARP share of refinance applications fell to 25 percent. The adjustable-rate mortgage (ARM) share of activity increased to 3 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 3.50 percent from 3.47 percent, with points increasing to 0.44 from 0.36 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  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) decreased to 3.73 percent, the lowest rate in the history of the survey, from 3.77 percent, with points decreasing to 0.29 from 0.35 (including the 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 the FHA increased to 3.34 percent from 3.32 percent, with points increasing to 0.54 from 0.51 (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 decreased to 2.83 percent, the lowest rate in the history of the survey, from 2.85 percent, with points remaining unchanged at  0.26 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.61 percent from 2.63 percent, with points increasing to 0.36 from 0.34 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.