Wednesday, July 10, 2013

MBA: Mortgage Refinance Applications Decline as Mortgage Rates Increase in Latest Weekly Survey

by Bill McBride on 7/10/2013 08:14:00 AM

From the MBA: Mortgage Applications Decrease as Rates Reach Two-year High in Latest MBA Weekly Survey

The Refinance Index decreased 4 percent from the previous week. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier.
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 4.68 percent, the highest rate since July 2011, from 4.58 percent, with points increasing to 0.46 from0.43 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added
Note: This was for a holiday week with a large seasonal adjustment. I expect a large decline in refinance activity in the survey next week.

Mortgage Refinance Index Click on graph for larger image.

The first graph shows the refinance index.

With 30 year mortgage rates above 4.5%, refinance activity has fallen sharply, decreasing in 8 of the last 9 weeks.

This index is down 50% over the last nine weeks.

Mortgage Purchase Index The second graph shows the MBA mortgage purchase index.  The 4-week average of the purchase index has generally been trending up over the last year, and even with the recent decline, the 4-week average of the purchase index is up almost 10% from a year ago.

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