Mortgage application volume increased by 7.8% on a seasonally adjusted basis for the week ended May 13, as the continuing decline in interest rates drives those consumers who can to refinance. Still, refi application volume is 50% below the most recent peak in this activity which occurred last October, according to the Mortgage Bankers Association.
Rates on the 30-year fixed-rate loan dropped for the fifth consecutive week, and they are now 53 basis points below the peak for this year, said Michael Fratantoni, MBA's vice president of research. In turn, the Refinance Index is up 33% over the past five weeks.
The Refinance Index increased 13.2% from the previous week, reaching its highest point since Dec. 10, 2010. The market share of refi applications increased to 66.7% from 63.1% one week prior. MBA tracks activity through its proprietary application index.
The seasonally adjusted Purchase Index decreased by 3.2%. On an unadjusted basis, this index is 1.7% lower than the same week in 2010.
The average contract interest rate for 30-year fixed-rate mortgages decreased 7 basis points to 4.60 % from 4.67%, with points decreasing to 0.94 from 1.10 (including the origination fee) for 80% loan-to-value ratio loans. This is the lowest point this rate has been since the end of November last year.
The average contract interest rate for the 15-year FRM decreased 6 basis points to 3.75% from 3.81%. Points increased to 1.22 from 1.05. The last time this rate was this low was in early November 2010.
