Mortgage originations are still finding much of their strength in the refinance sector even during those weeks when rates increase. The Mortgage Bankers Association (MBA) said the volume of mortgage applications increased last week even as purchase mortgage volume declined. MBA's Market Composite Index, a measure of mortgage loan application volume, increased 1.2 percent on a seasonally adjusted basis during the week ended May 14 and rose 1.0 percent before adjustment.
The Refinance Index rose for the second straight week, increasing 4 percent although it was down 2 percent compared to the same week one year ago. The refinance share of mortgage activity increased to 63.3 percent of total applications from 61.3 percent during the week ended May 7.
Both the seasonally adjusted and the unadjusted Purchase Indices were down 4 percent from one week earlier. The unadjusted Index was 2 percent higher than the same week in 2020.
The FHA share of total applications decreased to 9.2 percent from 9.9 percent the prior week, the VA share increased to 12.0 percent from 11.7 percent and USDA applications accounted for 0.4 percent, down from 0.5 percent. The origination balance of all loans increased from $337.700 the prior week to $338,500 and purchase mortgage balances rose to $411,400 from $409,800.
The average contract interest rate for 30-year fixed-rate mortgages (FRM) with origination balances at or below the conforming limit of $548,250 increased to 3.15 percent from 3.11 percent, with points increasing to 0.36 from 0.32. The effective rate rose to 3.26 percent.
The rate for jumbo 30-year FRM, loans with balances higher than the conforming limit, increased to 3.31 percent from 3.27 percent. Points declined to 0.27 from 0.34 and the effective rate grew 3.39 percent.
Thirty-year FRM with FHA guarantees had an average rate of 3.13 percent, a 6 basis point increase from the previous week. Points dipped to 0.30 from 0.34 and the effective rate was 3.22 percent.
The rate for 15-year FRM was 2.54 percent with 0.32 point. The prior week it was 2.49 percent with 0.29 point. The effective rate increased to 2.62 percent.
The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) was 2.58 percent, up from 2.57 percent. Points grew to 0.25 from 0.22 and the effective rate moved to 2.67 percent. The ARM share of mortgage applications increased from 3.08 percent the prior week to 3.9 percent.
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