Mortgage Banker Applications Increase by 11%

After bottoming out the previous week, the Mortgage Bankers Association Market Composite Index increased by 11% on a seasonally adjusted basis, aided by a 15% increase in the refinance component and a near 7% increase in the purchase component. The MCI, an overall measure of mortgage applications, was 493.1, for the week ended July 3, up from 444.8 one week earlier; the results were adjusted for a shortened week due to Independence Day. On an unadjusted basis, the index decreased 0.5% compared with the previous week and increased 7.2% compared with the same week one year earlier. The refinance index, which had decreased by 30% for the week ended June 26, recovered about half of the loss, going to 1707.7 from 1482.2 the week before. The seasonally adjusted purchase index increased to 285.6 from 267.7 one week earlier. However, refis are still not the majority share of new applications, even though they did increase to 48.4% from 46.4% the previous week. The share of adjustable-rate mortgages applications increased to 4.4% from 4.3% for the previous week, the MBA said. The increase in refis came even though there was no downward movement in rates, as the average contract interest rate for 30-year fixed-rate mortgages remained at 5.34%, with points (including the origination fee) increasing to 1.13 from 1.12 for loans with 80% loan-to-value ratios, the association reported. The average contract interest rate for 15-year FRMs increased two basis points to 4.83%, while for one-year adjustable rate loans, it increased 6 BPs to 6.58%. The MBA can be found online at http://www.mortgagebankers.org.