Mortgage Applications in U.S. Decline 9.2 Percent

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According to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending June 13, 2014, mortgage applications decreased 9.2 percent from one week earlier.

The Market Composite Index, a measure of mortgage loan application volume, decreased 9.2 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 10 percent compared with the previous week.

The Refinance Index decreased 13 percent from the previous week.  The seasonally adjusted Purchase Index decreased 5 percent from one week earlier.  The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 15 percent lower than the same week one year ago.

"Interest rates increased relative to the previous week, as incoming economic data continues to suggest a pickup in the pace of growth," said Mike Fratantoni, MBA's Chief Economist.  "Although the average rate for the week was up only a few basis points, the increase was matched by a large drop in refinance volume, and purchase application volume also declined.  Some lenders continue to report that they have pre-approved borrowers who have been unable to find a property given the tight inventory in certain markets."

The refinance share of mortgage activity decreased to 52 percent of total applications from 54 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 8 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.36 percent from 4.34 percent, with points increasing to 0.24 from  0.16 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.32 percent from 4.27 percent, with points decreasing to 0.09 from 0.12 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.07 percent from 4.06 percent, with points decreasing to -0.39 from -0.03 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.50 percent from 3.43 percent, with points decreasing to 0.16 from 0.22 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.20 percent from 3.18 percent, with points decreasing to 0.27 from 0.35 (including the origination fee) for 80 percent LTV loans.  The effective rate remained unchanged from last week.