Despite a drop in home-purchase activity, overall mortgage application volume posted strong growth last week, the Mortgage Bankers Association reported today.
The group’s market composite index, a measure of home loan application volume, rose 7.5 percent last week on a seasonally adjusted basis from a week earlier, boosted by a surge in refinance applications.
The index that tracks refinance applications jumped 22.1 percent from mid-January, pushing its share of mortgage activity from 66 percent to 73 percent, while the purchase-loan index tumbled 17.7 percent, MBA reported.
The adjustable-rate mortgage (ARM) share of activity decreased to 8.6 percent last week from 9.3 the previous week.
On the heels of four straight weeks of falling interest rates, borrowing costs last week began to rise. The average interest rate on 30-year fixed-rate mortgages climbed to 5.6 percent from 5.49 percent one week earlier; the average rate on 15-year fixed loans gained to 5.04 percent from 4.96 percent; and average rates on the one-year ARM grew to 5.7 percent from 5.51 percent.
Points, or loan-processing fees expressed as a percent of the total loan amount, averaged 1.06 on the 30-year loans, 1.12 on the 15-year, and 0.97 on one-year ARMs. 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.