Refinancing activity increased as interest rates fell to new lows according to the Weekly Mortgage Applications Surveyreleased this morning. The Market Composite Index, a measure of application volume, rose 2.8 percent on a seasonally adjusted basis and 3 percent unadjusted during the week ended September 21.
The Refinancing Index was up 3 percent from the previous week to the highest level in six weeks and the Mortgage Bankers Association which conducts the weekly survey said that the refinancing share of mortgage applications increased to 81.2 percent. The seasonally adjusted Purchase Index increased 1 percent from the week ended September 14 and the unadjusted index was down 0.3 percent from a week earlier but was 5 percent above the level during the same week in 2011.
The average contract interest rate for every type of loan tracked by the MBA either established a new survey low or matched one during the week and the effective rate decreased for every fixed rate product.
The rate for 30-year fixed-rate mortgages (FRM) with conforming balances of $417,500 or less decreased to 3.63 percent from 3.72 percent with points decreasing to 0.41 from 0.45. The rate for jumbo 30-year FRM (with balances greater than $417,500) dropped 12 basis points to 3.87 percent with points decreasing to 0.33 from 0.35.
Rates for 30-year FRM backed by FHA decreased to 3.44 percent with 0.41 point from 3.50 percent with 0.57 point.
Contract rates for 15-year FRM dropped below 3 percent, averaging 2.98 percent compared to 3.03 percent the previous week. Points increased to 0.41 from 0.39.
The average rate for 5/1 ARMS equaled the survey low established the previous week, 2.61 percent, with points increasing to 0.41 from 0.32. This was the sole product for which the effective rate increased. Four percent of applications during the week were for adjustable rate mortgages.
Interest rates quoted are for mortgages with loan to value rations of 80 percent and points include the application fee.
MBA’s weekly survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.