A key measure of mortgage application volume rose last week as growth in interest rates slowed, the Mortgage Bankers Association reported today.
The MBA’s market composite index edged up 0.7 percent on a seasonally adjusted basis from the first week of October, and includes an adjustment to account for the Columbus Day holiday.
The index component that tracks purchase loans gained 2.1 percent between the first and second weeks of the month, while the refinance index actually declined 1.1 percent during the period, according to MBA.
As a result, the refinance share of loan applications decreased to 45.3 percent last week from 46.2 percent the previous week, and the adjustable-rate mortgage (ARM) share of activity dipped from 13.6 percent to 13.5 percent.
Interest rates on long-term loans were mixed last week, while those on ARMs moved higher, according to MBA. The average contract interest rate on 30-year fixed-rate mortgages held at 6.4 percent; the 15-year fixed rate grew to an average 6.09 percent from 6.03 percent; and the one-year ARM increased to 6.17 percent from 6.15 percent.
Points, which are loan-processing fees expressed as a percent of the total loan amount, averaged 1.04 on the 30-year loans, 1.03 on the 15-year, and 0.94 on one-year ARMs — compared with 1, 1.12 and 0.92, 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.