by Bill McBride on 1/13/2016 07:01:00 AM
Wednesday, January 13, 2016
Mortgage applications increased 21.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 8, 2016. The previous week’s results included an adjustment for the New Year’s holiday.Click on graph for larger image.
The Refinance Index increased 24 percent from the previous week. The seasonally adjusted Purchase Index increased 18 percent from one week earlier. The unadjusted Purchase Index increased 74 percent compared with the previous week and was 19 percent higher than the same week one year ago
“MBA’s purchase mortgage application index reached its second highest level since May 2010 on a seasonally adjusted basis last week, second only to the week prior to the implementation of the Know Before You Owe rules,” said Lynn Fisher, MBA’s Vice President of Research and Economics.
“Bolstered by strong fourth quarter growth in jobs and continuing low rates, the results are similar to levels we saw in early December, suggesting that the purchase market’s strong finish to 2015 may be continuing. While refinances also increased on a holiday-adjusted basis, refinance activity was down 38 percent relative to a year ago when rates dove below 4 percent,” Fisher continued.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.12 percent from 4.20 percent, with points decreasing to 0.38 from 0.42 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
The first graph shows the refinance index since 1990.
Refinance activity was higher in 2015 than in 2014, but it was still the third lowest year since 2000.
Refinance activity will probably stay low in 2016, and will probably be lower than in 2014 and 2015.
The second graph shows the MBA mortgage purchase index.
According to the MBA, the unadjusted purchase index is 19% higher than a year ago.
Posted by Bill McBride on 1/13/2016 07:01:00 AM