Mortgage Applications Uptick 4.9 Percent, Surprise Market

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Based on the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending November 14, 2014, mortgage applications in the U.S. increased 4.9 percent from one week earlier, surprising many analysts.

The surprise increase in mortgage volume was mainly driven by applications to purchase a home, versus refi applications, which has been the case over the last few months.

The Market Composite Index, a measure of mortgage loan application volume, increased 4.9 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 7 percent compared with the previous week.

The Refinance Index increased 1 percent from the previous week.  The seasonally adjusted Purchase Index increased 12 percent from one week earlier to the highest level since July 2014.  The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 6 percent lower than the same week one year ago.

The refinance share of mortgage activity decreased to 61 percent of total applications from 63 percent the previous week.  The adjustable-rate mortgage (ARM) share of activity decreased to 6.9 percent of total applications.

The FHA share of total applications increased to 9.9 percent this week from 9.6 percent last week.  The VA share of total applications increased to 11.5 percent this week from 11.0 percent last week.  The USDA share of total applications fell to 0.8 percent this week from 0.9 percent last week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.18 percent from 4.19 percent, with points decreasing to 0.24 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 4.10 percent from 4.13 percent, with points increasing to 0.16 from 0.15 (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 3.85 percent from 3.90 percent, with points increasing to 0.18 from 0.14 (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 remained unchanged from 3.38 percent, with points increasing to 0.27 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 3.09 percent from 3.05 percent, with points increasing to 0.34 from 0.32 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

The results include an adjustment for the Veterans Day holiday.