by Bill McBride on 9/25/2013 07:01:00 AM
Wednesday, September 25, 2013
Mortgage applications increased 5.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 20, 2013....Click on graph for larger image.
The Refinance Index increased 5 percent from the previous week. The seasonally adjusted Purchase Index increased 7 percent from one week earlier. ... The Purchase Index was at its highest level since July 2013.
The HARP share of refinance applications increased to 41 percent from 40 percent the week before, and is the highest since MBA started tracking this measure in early 2012.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.62 percent from 4.75 percent, with points increasing to 0.41 from 0.39 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
The first graph shows the refinance index.
The refinance index increased partially because of more HARP refinance activity. I expect to see even more HARP activity soon. From Mortgage News Daily: HARP is a "No Brainer" -FHFA
Feeling that they may have reached only about half of the families who could benefit from the program, the Federal Housing Finance Agency (FHFA) launched a campaign today to inform homeowners about the Home Affordable Refinance Program (HARP). ...The second graph shows the MBA mortgage purchase index.
Acting FHFA Director Edward J. DeMarco said that 2.8 million homeowners have refinanced through HARP but with mortgage rates still historically low and HARP eligibility requirements expanded, other qualified homeowners could reduce their monthly mortgage payments or build their equity faster with a shorter term mortgage through the program.
DeMarco told Bloomberg News in an interview this weekend that FHFA used focus groups to find out why borrowers with high rates hadn't yet tried to refinance through HARP. They found many didn't realize they were eligible. They thought they had to be delinquent on their mortgages before the government would help them. DeMarco said he hoped the educational outreach would bring in an additional 2 million HARP borrowers.
The 4-week average of the purchase index was generally been trending up over the last year (but down over the last few months), and the 4-week average of the purchase index is at the highest level since July and up over 3% from a year ago.
Posted by Bill McBride on 9/25/2013 07:01:00 AM