Mortgage Refinance Activity Continues to Drop as Rates Rise

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Today the Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey  for the week ending November 26, which showed a 16.5 percent decreased on a seasonally adjusted basis from one week earlier. This week's results include an adjustment to account for the Thanksgiving holiday.  On an unadjusted basis, the Index decreased 34.2 percent compared with the previous week.

The Refinance Index decreased 21.6 percent from the previous week.  This is the third weekly decrease for the Refinance Index which reached its lowest level since June 2010.  The seasonally adjusted Purchase Index increased 1.1 percent from one week earlier and is at its highest level since the beginning of May 2010. The unadjusted Purchase Index decreased 22.9 percent compared with the previous week and was 2.7 percent higher than the same week one year ago.

The four week moving average for the seasonally adjusted Market Index is down 5.8 percent.  The four week moving average is up 3.8 percent for the seasonally adjusted Purchase Index, while this average is down 8.2 percent for the Refinance Index.

The refinance share of mortgage activity decreased to 74.9 percent of total applications from 78.6 percent the previous week. This is the third consecutive weekly decrease for refinance share which is at its lowest level since June 2010. The adjustable-rate mortgage (ARM) share of activity increased to 5.7 percent from 5.3 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages increased to 4.56 percent from 4.50 percent, with points increasing to 0.96 from 0.87 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The average contract interest rate increased for the fourth time in five weeks and is at the highest level reported since August 2010.  The effective rate also increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.91 percent from 3.83 percent, with points decreasing to 0.88 from 1.04 (including the origination fee) for 80 percent LTV loans. The effective rate also increased from last week.

 

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