Several contract rates tracked by the Mortgage Bankers Association hit new lows during the week ending May 25, but seasonally adjusted overall application numbers inched downward in data unadjusted for early holiday closes the Friday before Memorial Day.
The association’s market composite index, which measures overall mortgage application volume, dropped 1.3% on a seasonally adjusted basis from the previous week and was 1.6% lower on an unadjusted basis. The refinance index fell 1.5% during the same period.
Also, the purchase index slipped 0.6% on a seasonally adjusted basis and 1.8% on an unadjusted basis week-to-week. Compared to the same week a year ago, the purchase index was down 3.9%.
However, on a moving average basis over the past four weeks applications overall have been trending up by 3.23%, with the refi index up 4.36% and the purchase index down just 0.67%.
The percentage of apps that are refis remained constant on a week-to-week basis at 76.6%. The adjustable-rate mortgage share dropped 0.1% to 4.9% during the same period.
Among contract rates dropping to record lows last week were the popular 30-year FRM rates in the conforming and Federal Housing Administration markets.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) fell to 3.91% from 3.93%, with points increasing to 0.46 of a point from 0.39 of a point (including the origination fee) for 80% loan-to-value ratio loans. Due to points, the effective rate increased during the week.
Loans that match that that description except for size in the jumbo market also saw their relatively higher average contract rate inch down by two basis points week-to-week. This brought the average contract rate for these loans to 4.23%. Average points for 30-year jumbos dropped by 0.02 of a point to 0.4 of a point.
The average contract rate for FHA-backed 30-year FRMs dropped by three basis points from the previous week to 3.7%. Average points on these loans increased to 0.59 of a point from 0.57 of a point for 80% LTV loans, but the effective rate still was lower than the previous week.
Also dropping to an all-time record low was the average contract rate for 15-year FRMs. This contract rate dropped to 3.23% from 3.26%, with points decreasing to 0.39 of a point from 0.42 of a point (including the origination fee) for 80% LTV loans.
The average contract interest rate for 5/1 hybrid loans also decreased to a record low. The average contract rate for these loans was 2.77%, down from 2.83% the previous week. Points for these loans dropped to 0.38 of a point from 0.42 of a point (including the origination fee) if they had 80% LTVs.
