Mortgage apps spike as rates reach new lows

by 14 Jul 2016
Mortgage applications jumped more than 7% last week as rates hit their lowest level in years, according to new data from the Mortgage Bankers Association

The MBA’s Market Composite Index, which measures mortgage application volume, was up 7.2% on a seasonally adjusted basis last week from the week before. On an anudjusted basis, the index was down 14% compared to the previous week. The Refinance Index was up 11%, and the seasonally adjusted Purchase Index was unchanged from the week before. On an unadjusted basis the Purchase Index was down 20% from the previous week and was 5% lower than the same week a year ago.
However, the Fourth of July fell on the previous week last year.

The refinance share of mortgage activity jumped to 64% of total applications last week from 61.6% the week before. The adjustable-rate mortgage share, meanwhile, decreased to 5.2% of total applications.
All of this came as rates fell to lows not seen in years. The average interest rate for 30-year fixed-rate mortgages with conforming loan balances dropped to 3.60% -- its lowest level since May of 2013 – from 3.66% the previous week. The average rate for jumbo 30-year FRMs dropped to 3.61% from 3.67%.

Adjustable-rate mortgages also saw rate decreases. The average rate for 5/1 ARMs dropped to 2.78% from 2.85% the previous week.
 

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