Initial refinance activity was solidly higher last week as prospective borrowers acted on falling rates. But purchase activity slowed.
New applications for U.S. home loans during the week ended Jan. 15 increased by
nine percent compared to seven days previous.
The activity was based on the Market Composite Index, which is reportedly a
measure of mortgage loan application volume.
The index, which is seasonally adjusted, is included in the
Weekly Mortgage Applications Survey report from the Mortgage Bankers Association.
Without any seasonal adjustments, the index was up 12 percent from the week ended Jan. 8.
Applications for refinances surged by 19 percent on a seasonally adjusted basis.
The strengthening refinance activity came as conforming 30-year fixed rates slid six basis points from a week earlier to 4.06 percent — the lowest level since October.
In line with the stronger refinance
activity was a fatter refinance share, which widened to 59.1 percent in the latest report from 55.8 percent one week earlier.
MBA reported that applications for purchase financing were down two percent for the week.
On an unadjusted basis, purchase activity rose four percent and was up 17 percent from the same week in 2015.
The trade group separately released its Builder Application Survey, which showed a five percent decline in December for new home purchase
mortgage applications versus November.
MBA reported that applications for adjustable-rate mortgages
accounted for 6.0 percent of all activity tracked in its latest Market Composite Index report. ARM share climbed from 5.1 percent in the previous report.
Applications for mortgages insured by the Federal Housing Administration represented 13.7 percent of all applications. FHA share diminished from 14.4 percent a week earlier.
Also in the government category were applications for loans guaranteed by the Department of Veterans Affairs, which accounted for 10.8 percent of the weekly total. VA share fell from 12.2 percent in the last report.
The jumbo-conforming spread was a negative 13 BPS. In MBA’s last survey, interest rates on jumbo mortgages were 10 BPS lower than on conforming loans.
