Refis tumble during Thanksgiving week

Despite an uptick in loan applications for home purchases, overall application volume fell during the week of Thanksgiving, the Mortgage Bankers Association reported today.

The group's market composite index, a measure of total home loan application volume, dropped 4.3 percent on a seasonally and holiday adjusted basis from mid-month, taken lower by a double-digit decline in refinancing activity.

MBA reported a 6.1 percent increase in the index that tracks applications for purchase loans, while the refinance index sank 15.3 percent. As a result, the refi share of applications last week dropped to 45.8 percent from 50.3 percent a week earlier, and the adjustable-rate mortgage (ARM) share dipped from 15.8 percent to 14.6 percent.

Borrowing costs were mostly lower in the survey as the average contract interest rate on 30-year fixed-rate mortgages last week fell to 6.09 percent from 6.18 percent one week earlier, and the average 15-year fixed sank to 5.69 percent from 5.71 percent. The average rate on one-year ARMs, however, jumped from 5.98 percent to 6.24 percent.

Points, or loan-processing fees expressed as a percent of the total loan amount, averaged 1.07 on the 30-year loans, 1.13 on the 15-year, and 0.96 on one-year ARMs -- compared with 1.01, 1.12 and 0.89, respectively, in the previous week. These points include the origination fee and are based on loan-to-value ratios of 80 percent.

The Mortgage Bankers Association survey covers approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.

All rights reserved. This content may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this content without permission is a violation of federal copyright law.