Mortgage loan applications for the week ending Nov. 16 fell 3.6 percent on a seasonally adjusted basis from a week earlier, with refinance and adjustable-rate mortgages accounting for a larger share of applications than the week before, the Mortgage Bankers Association reports.

The MBA’s Market Composite Index, a measure of mortgage loan application volume, was 681.7, a decrease of 3.6 percent on a seasonally adjusted basis from 707.3 one week earlier. On an unadjusted basis, the index decreased 5.2 percent compared with the previous week and was up 9.8 percent compared with the same week one year earlier.

The Refinance Index decreased 5 percent to 2,199.9 from 2,315.7 the previous week and the seasonally adjusted Purchase Index decreased 2 percent to 424.1 from 432.6 one week earlier. 

The refinance share of mortgage activity increased to 50.3 percent of total applications from 50.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 15.8 from 15.5 percent of total applications from the previous week.

On an unadjusted basis, the Purchase Index decreased 5.5 percent to 373.7 from 395.4 the previous week. The seasonally adjusted Conventional Index decreased 3.9 percent to 977.4 from 1,017 the previous week, and the seasonally adjusted Government Index decreased 1.1 percent to 188.7 from 190.8 the previous week.
 
The four week moving average for the seasonally adjusted Market Index is up 0.9 percent to 685.3 from 679.0. The four-week moving average is up 0.5 percent to 420.6 from 418.5 for the Purchase Index, while this average is up 1.6 percent to 2,235.2 from 2,200 for the Refinance Index.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 6.18 percent from 6.19 percent, with points decreasing to 1.01 from 1.16 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.71 from 5.77 percent, with points decreasing to 1.12 from 1.13 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year ARMs remained unchanged at 5.98 percent, with points decreasing to 0.89 from 0.93 (including the origination fee) for 80 percent LTV loans.

Freddie Mac’s Interest Rate Survey

Meanwhile, Freddie Mac’s weekly survey also showed interest rates on 15- and 30-year fixed-rate mortgages fell this week, while rates on adjustable-rate mortgages linked to one-year and five-year Treasurys fell even more sharply.

The interest rate on a 30-year fixed-rate mortgage for the week ending Nov. 21 averaged 6.2 percent with an average 0.5 point, Freddie Mac reported today in its weekly Primary Mortgage Market Survey. That’s down 4 basis points from last week’s 6.24 percent interest rate, but 2 basis points above the 6.18 percent rate charged a year ago. The 30-year fixed rate mortgage has not been lower since the week ending May 10, 2007, when it averaged 6.15 percent.

The interest rate on a 15-year fixed-rate mortgage averaged 5.83 percent with an average 0.5 point, down 5 basis points from 5.88 percent a week ago and 8 basis points from the 5.91 percent charged a year ago.  The 15-year fixed-rate mortgage has not been lower since the week ending Feb. 2, 2006, when it averaged 5.81 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.88 percent this week with an average 0.5 point, down 8 basis points from last week’s 5.96 percent and down 11 basis points from the rate a year ago, 5.99 percent.  The 5-year ARM has not been lower since the week ending May 3, 2007 when it averaged 5.87 percent.

One-year Treasury-indexed ARMs averaged 5.42 percent this week with an average 0.6 point, down 8 basis points from last week’s rate, 5.50 percent.  At this time last year, the 1-year ARM averaged 5.49 percent.  The 1-year ARM has not been this low since the week ending March 22, 2007, when it averaged 5.40 percent.

“Both the producer price index and the consumer price index remained contained in October while industrial production fell,” said Frank Nothaft, Freddie Mac vice president and chief economist, allowing interest rates to decline.

Nothaft said the housing market remains weak, continuing to be a drag on the economy, with single-family housing starts falling 6.4 percent in October to 917,000 units (annualized), the slowest pace since September 1991, nearly 25 percent below that of October 2006. Home builder confidence in November remained at the lowest level on record, Nothaft said.

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