by
Jann Swanson Dec 12 2012
Record lows in interest rates were accompanied by an increase in mortgage refinancing activity during the week ended December 7. The Mortgage Bankers Association reports that its Market Composite Index, a measure of mortgage loan application volume, rose 6.2 percent on a seasonally adjusted basis from a week earlier and was up 6 percent on an unadjusted basis.
The Refinance Index was up 8 percent from the previous week and at its highest level since the week ended October 12. Applications for refinancing had an 84 percent share of business compared to 82 percent during the week ended December 1. Refinancing through the Home Affordable Refinance Program (HARP) accounted for 29 percent of refinance applications compared to 27 percent the prior week.
The seasonally adjusted Purchase Index increased about 1 percent and the unadjusted Purchase Index was down 4 percent week-over-week but 9 percent higher than the same week in 2011.
The contract rate for FHA-backed 30-year FRM decreased to 3.32 percent with 0.51 point, the lowest rate in the history of the survey, from 3.34 percent with 0.62 point.
Fifteen-year fixed-rate mortgage rates declined on average by 1 basis point to 2.85 percent, the lowest rate in the history of the survey. Points decreased to 0.26 from 0.27
Adjustable rate mortgages were the only products for which rates increased. The average contract interest rate for 5/1 ARMs increased to 2.63 percent from 2.62 percent, with points decreasing to 0.34 from 0.40 and the effective rate increased. The adjustable-rate mortgage (ARM) share of activity remained at 3 percent of total applications.
Rates are derived from MBA's Weekly Mortgage Application Survey which covers over 75 percent of all U.S. retail mortgage applications and has been conducted since 1990. Rates are quoted for loans with an 80 percent loan-to-value ratio and points include the origination fee. Base period and value for all indexes is March 16, 1990=100.
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