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Wednesday, October 21, 2015

MBA: Mortgage Applications Increase in Latest Weekly Survey, Purchase Applications up 9% YoY

by Calculated Risk on 10/21/2015 07:03:00 AM

This index has had some wild swings recently due to the TILA-RESPA regulatory change that led to a surge in activity as borrowers filed applications before the change, and then a sharp decline in the survey released last week.

From the MBA: Government Applications Drive Increase in Latest MBA Weekly Survey

Mortgage applications increased 11.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 16, 2015. This week’s results include an adjustment to account for the Columbus Day holiday.
The Refinance Index increased 9 percent from the previous week. The seasonally adjusted Purchase Index increased 16 percent from one week earlier. The unadjusted Purchase Index increased 5 percent compared with the previous week and was 9 percent higher than the same week one year ago.

“On an adjusted basis, application volume increased last week, led by a sharp rebound in government volume. We expect that application volume will remain volatile over the next few weeks as the industry continues to implement TILA-RESPA integrated disclosures,” 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) decreased to 3.95 percent, the lowest level since May 2015, from 3.99 percent, with points decreasing to 0.43 from 0.53 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added
Mortgage Refinance Index Click on graph for larger image.

The first graph shows the refinance index.

Refinance activity remains low.

2014 was the lowest year for refinance activity since year 2000, and refinance activity will probably stay low for the rest of 2015.

Mortgage Purchase Index The second graph shows the MBA mortgage purchase index.  

According to the MBA, the unadjusted purchase index is 9% higher than a year ago.

The wild swings should resolve fairly quickly.