Mortgage Applications Increase in Late January

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According to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending January 30, 2015, mortgage applications increased 1.3 percent from one week earlier.

The Market Composite Index, a measure of mortgage loan application volume, increased 1.3 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 15 percent compared with the previous week.

The Refinance Index increased 3 percent from the previous week.  The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index increased 16 percent compared with the previous week and was 3 percent higher than the same week one year ago.

"Following several weeks of already elevated refinance activity due to falling interest rates, FHA refinance applications increased 76.5 percent in response to a reduction in annual mortgage insurance premiums which took effect January 26," said Lynn Fisher, MBA's Vice President of Research and Economics.  "Conventional refinance volume was up only 0.5 percent for the week while VA refinance volume was down 24.3 percent.  FHA purchase applications were also up 12.4 percent over the week prior, despite a decrease in purchase applications in the rest of the market."

The refinance share of mortgage activity decreased to 71 percent of total applications from 72 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.3 percent of total applications.

The FHA share of total applications increased to 13.1 percent this week from 9.1 percent last week.  The VA share of total applications decreased to 8.5 percent this week from 10.7 percent last week.  The USDA share of total applications decreased to 0.6 percent from 0.7 percent last week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.79 percent, the lowest level since May 2013, from 3.83 percent, with points increasing to 0.29 from  0.26 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.82 percent, the lowest level since May 2013, from 3.87 percent, with points decreasing to 0.22 from 0.33 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.69 percent from 3.71 percent, with points remaining unchanged at 0.07 (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 decreased to 3.14 percent from 3.15 percent, with points increasing to 0.31 from 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 5/1 ARMs increased to 3.03 percent from 2.96 percent, with points decreasing to 0.39 from 0.42 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.