MBA Survey Shows Refinancing Applications Driving Market

Refinance applications made up more than seven of every 10 mortgage applications submitted for the week ended Nov. 6, the Mortgage Bankers Association Weekly Mortgage Applications Survey found. The market share of refinance applications, according to the survey, rose to 71.5% from 66.1% for the previous week. MBA said this is the largest share of refi applications since this past May, when 30-year fixed rates were near an historical low. The Market Composite Index, a measure of loan application volume, increased 3.2% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 2.8% compared with the previous week. The Refinance Index increased 11.3% from the previous week but lower rates have not yet contributed to an increase in purchase applications. The seasonally adjusted Purchase Index decreased 11.7% from one week earlier. The share of adjustable rate mortgage applications fell to 5.5% for the week, from 6.1% one week prior. The average contract interest rate for 30-year fixed-rate mortgages fell to 4.90% from 4.97%, with points increasing to 1.03 from 1.01 (including the origination fee) for loans with an 80% percent loan-to-value ratio, the association reported. The average contract interest rate for 15-year FRMs was unchanged from the previous week, at 4.33%, while for one-year adjustable rate loans, rates increased by 2 BP to 6.85%. The MBA stopped disclosing index values with the July 31 data release. The group released this information a day later than normal because Wednesday this week was Veterans' Day. The MBA can be found online at http://www.mortgagebankers.org.