Mortgage applications were on the rise from the start of January 2016 through the third week of the month, before declining slightly at month’s end according to news releases¹ from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.
In early 2016, for the week ending January 8, 2016 the Market Composite Index, a measure of the volume of home loan applications, was 21.3% on a seasonally adjusted basis compared to the previous week. This takes into account an adjustment for the New Year’s holiday during the week before.
Refinances made up 55.8% of all applications, up slightly from 55.4% one week earlier. Purchase business which had been strong at the close of 2015 remained so. MNA’s Vice President of Research and Economics Lynn Fisher cited strong fourth quarter growth in jobs and continuing low rates2 among factors driving this trend.
The second week in January saw further, though not quite so dramatic, increases. For the week ending January 15, 2016 application volume was up 9.0% on a seasonally adjusted basis. Average mortgage rates for 30-year fixed conforming loans fell to 4.06% from 4.12%, which may have motivated additional refinance applications. Refinance activity represented 59.1% of applications, up from 55.8% one week earlier.
Application volume continued the upward trend the week ending January 22, 2016, with an increase of 8.8%, with data including an adjustment for the Martin Luther King, Jr. holiday. Both purchase and refinance activity increased, with refinancing accounting for 59% of total applications.
January closed with a slight decrease in mortgage applications, with The Market Composite Index down 2.6% for the week ending January 29, 2016. Government loans made up 24.7% of application volume, with FHA, VA, and USDA Rural Housing Loans representing 12.9%, 11.1%, and 0.7% respectively.
Average interest rates continued to move lower. The average contract interest rate for 30-year fixed-rate conforming home loans (80% LTV) fell to 3.97% and points averaged 0.41%.
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Tags: application trends