Home loan applications picked up last week despite an increase in long-term mortgage rates, the Mortgage Bankers Association reported today.
The market composite index, a measure of total mortgage application volume, last week rose 2.4 percent on a seasonally adjusted basis from the final week of September, according to MBA. The index that tracks refinancings posted the strongest growth, at 2.7 percent, followed by the purchase-loan index, which gained 2.1 percent from the previous week.
Interest rates on long-term loans were higher last week, while those on adjustable-rate mortgages (ARMs) fell, MBA reported. The average contract interest rate on 30-year fixed-rate mortgages climbed to 6.4 percent from 6.32 percent; the 15-year fixed rate grew to an average 6.03 percent from 5.95 percent; and the one-year ARM decreased to 6.15 percent from 6.21 percent.
Points, which are loan-processing fees expressed as a percent of the total loan amount, averaged 1 on the 30-year loans, 1.12 on the 15-year, and 0.92 on one-year ARMs — compared with 1.08, 1.07 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.
MBA reported that the refinance share of mortgage applications increased to 46.2 percent from 46 percent the previous week, while the ARM share dipped from 13.8 percent to 13.6 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.