Survey: Borrowers jump at chance to refi below 6%
Inman News
Mortgage application volume rose last week even as interest rates climbed, the Mortgage Bankers Association reported Wednesday.
The group's market composite index, a measure of total home loan application volume, gained 2.5 percent on a seasonally adjusted basis from the end of November, pushed higher by strong refinancing activity.
MBA reported an increase of 4.3 percent in the index that tracks applications for refinancings and a 1.7 percent gain in the purchase-loan index. As a result, the refi share of applications last week rose to 57.6 percent from 56 percent the previous week.
The adjustable-rate mortgage (ARM) share of activity, however, dropped to 9.4 percent from 11.6 percent the week before.
Borrowing costs rose considerably last week as the average contract interest rate on 30-year fixed-rate mortgages jumped to 6.07 percent from 5.82 percent one week earlier, and the average 15-year fixed climbed to 5.72 percent from 5.38 percent. The average rate on one-year ARMs moved from 6.28 percent to 6.31 percent.
Points, or loan-processing fees expressed as a percent of the total loan amount, averaged 1.17 on the 30-year loans, 1.01 on the 15-year, and 0.97 on one-year ARMs -- compared with 1.07, 1.12 and 0.99, respectively, in the previous week. These points include the origination fee and are based on loan-to-value ratios of 80 percent.
The Mortgage Bankers Association survey covers approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.
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