A considerable drop in interest rates last week sparked a rush to refinance but did little to drive home purchases, the Mortgage Bankers Association reported today.

While rates on long-term loans fell an average of 21 basis points from the second week of October, MBA’s market composite index — which measures overall mortgage application volume — inched up only slightly during the period. Dragging the index was a 3.1 percent decline in the measure that tracks purchase loans, despite a 4 percent rise in the refinance index.

Average interest rates on 30-year fixed-rate mortgages dropped from 6.4 percent to 6.21 percent last week, while the average 15-year fixed fell from 6.09 percent to 5.86 percent and the rate on one-year adjustable-rate mortgages (ARMs) dipped to 6.1 percent from 6.17 percent.

Points, which are loan-processing fees expressed as a percent of the total loan amount, averaged 1.13 on the 30-year loans, 1.06 on the 15-year, and 0.92 on one-year ARMs — compared with 1.04, 1.03 and 0.94, 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 loan applications grew to 47 percent last week, compared with 45.3 percent the previous week, and the ARM share rose to 14.2 percent from 13.5 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.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Thank you for subscribing to Morning Headlines.
Back to top
Inman Connect Black Friday Sale! Bundle our next two events or secure your 2021 All Access Pass.SEE THE DEALS×
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription