Due in large part to mortgage interest rates falling for the fifth consecutive week, mortgage refinance applications spiked in the week that ended Feb. 5, 2016, a new report from the Mortgage Bankers Association showed.
According to the MBA’s latest Weekly Mortgage Applications Survey, mortgage applications rose 9.3% in the week that ended Feb. 5, 2016 over the week prior.
Last week’s report showed a slight decrease in mortgage applications after three weeks of steady increases, but last week appears to be an outlier, as applications rose again thanks to low interest rates.
According to the MBA’s report, the Market Composite Index, a measure of mortgage loan application volume, increased 9.3% on a seasonally adjusted basis from one week earlier.
On an unadjusted basis, the Index increased 12% compared with the previous week.
The MBA’s report showed that much of that growth was from refinances, as the Refinance Index increased 16% from the previous week.
The seasonally adjusted Purchase Index increased just 0.2% from one week earlier.
The unadjusted Purchase Index increased 7% compared with the previous week and was also 25% higher than the same week one year ago.
Overall, the refinance share of mortgage activity increased to 61.2% of total applications from 59.2% the previous week.
The MBA report showed that the adjustable-rate mortgage share of activity increased to 6.4% of total applications.
According to the MBA’s report, the Federal Housing Administration’s share of total applications decreased to 12.3% from 12.9% the week prior.
The Department of Veteran Affair’s share of total applications remained unchanged from 11.1% the week prior.
The United States Department of Agriculture’s share of total applications decreased to 0.6% from 0.7% the week prior.
The MBA’s report also showed that the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to its lowest level since April 2015, falling to 3.91%, from 3.97%.
Additionally, the MBA report showed that the average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to its lowest level since April 2013, falling to 3.76% from 3.84% in the previous week.
The report also showed that the average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to its lowest level since May 2015, falling from 3.72% from 3.8% last week.
The MBA report also showed that the average contract interest rate for 15-year fixed-rate mortgages decreased to its lowest level since April 2015, dropping from 3.22% to 3.18%.
And, the average contract interest rate for 5/1 ARMs decreased to its lowest level since October 2015, dropping from 3% last week to 2.96%.
