by Bill McBride on 5/06/2015 07:01:00 AM
Wednesday, May 06, 2015
Mortgage applications decreased 4.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 1, 2015. ...Click on graph for larger image.
The Refinance Index decreased 8 percent from the previous week to the lowest level since January 2015. The seasonally adjusted Purchase Index increased 1 percent from one week earlier to its highest level since June 2013. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 12 percent higher than the same week one year ago.
“Refinance volume dropped last week as rates in the US increased sharply towards the end of the week, with signs of recovery in Europe lifting rates across the globe. Purchase activity increased slightly over the week, and the average loan amount for a purchase application reached a record high, a sign that the mix of purchase activity is still skewed toward higher priced homes,” said Mike Fratantoni, MBA’s Chief Economist.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.93 percent from 3.85 percent, with points remaining unchanged from 0.35 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
The first graph shows the refinance index.
2014 was the lowest year for refinance activity since year 2000.
It would take much lower rates - below 3.5% - to see a significant refinance boom this year.
The second graph shows the MBA mortgage purchase index.
According to the MBA, the unadjusted purchase index is 12% higher than a year ago.
Posted by Bill McBride on 5/06/2015 07:01:00 AM