Despite a drop in refinance activity, consumers looking to purchase homes boosted overall mortgage application volume last week, the Mortgage Bankers Association reported today.
The group’s market composite index, a measure of home loan application volume, rose 3 percent on a seasonally adjusted basis from the previous week. The index that tracks purchase loans jumped 12 percent (seasonally adjusted) during the period, but that growth was offset by a 1 percent decrease in the refinance index.
Borrowing costs on long-term loans were higher last week, MBA reported. The average interest rate on 30-year fixed-rate mortgages edged up to 5.61 percent from 5.6 percent one week earlier, and the average rate on 15-year fixed loans gained to 5.09 percent from 5.04 percent. The average rates on the one-year adjustable-rate mortgage (ARM), however, declined to 5.62 percent from 5.7 percent.
Points, or loan-processing fees expressed as a percent of the total loan amount, averaged 0.98 on the 30-year loans, 0.92 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.
According to MBA, the refinance share of mortgage activity decreased to 69.2 percent of total applications from 73 percent the previous week, while the ARM share increased to 8.8 percent from 8.6 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.
