A huge drop-off in refinancings pushed overall mortgage application volume down 19.2 percent last week, the Mortgage Bankers Association reported today.
According to MBA, the index that tracks refinancings declined 30.4 percent last week, following a 27.9 percent drop the week before. The index tracking applications for purchase loans barely budged with a 0.2 percent increase.
As a result, the refinance share of applications decreased to 52 percent last week from 61.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 15 percent from 12.8 percent during the period.
Borrowing costs rose across all loan types in the latest survey, MBA reported. The average interest rate on 30-year fixed-rate mortgages gained 18 basis points since mid-month, rising from 6.09 percent to 6.27 percent. The average rate on 15-year fixed loans jumped 22 basis points, from 5.55 percent to 5.77 percent. On one-year ARM loans, the average rate rose from 5.72 percent to 5.84 percent.
Points, or loan-processing fees expressed as a percent of the total loan amount, averaged 1.15 on the 30-year loans, 1.01 on the 15-year, and 0.86 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.
