Mortgage Application Volume Falls 8.1% in January

By -

The first few weeks of the new year brought a strong surge of mortgage application activity, but it seems the initial momentum has faded some, as recent reports show mortgage application volume fell toward the end of January. The Mortgage Bankers Association’s Market Composite Index, a measure of application volume, fell 8.1 percent for the week ending January 25 on a seasonally-adjusted basis from the week prior. On an unadjusted basis, the index fell 17 percent. The index also included an adjustment to account for the Martin Luther King, Jr. holiday.

downward trending bar graph

In addition to an overall decrease in mortgage activity, the Refinancing Index dropped 10 percent for the week ending January 18. For several weeks, refinancing took up 82 percent of the share of total mortgage activity, but for the week analyzed, the share fell to 79 percent. Of the total refinancing applications, 26 percent were for HARP refinancing. This represented a 1 percent increase from the previous week.

Purchase mortgage application volume fell 2 percent on a seasonally-adjusted basis from the previous week and 6 percent on an unadjusted basis. When compared to the same week in 2011, the purchase index was 2 percent higher on an un-adjusted basis.

Along with reporting statistics for mortgage application volume, the Mortgage Bankers Association (MBA) also tracks information on average contract interest and effective rates. According to a January 30 article from Mortgage News Daily, these rates increased for all fixed-rate products. The contract rate for jumbo 30-year fixed rate mortgage, those with balances higher than $417,500, increased to 3.95 percent. Average rates on FHA-backed 30-year fixed rate loans also increased, moving to 3.48 from 3.40 the previous week.

The MBA revealed that the average contract rate for 30-year fixed-rate mortgages with conforming balances of $417,500 or less increased 5 basis points to 3.67 percent, the highest rate since September 2012 and the sixth increase in seven weeks.

The rate increases may indicate that, while mortgage rates are still near record lows, they may not remain there for long. Those who wish to lock in a low rate soon, should consider reviewing rates for home loans and contacting lenders for information on 30, 20 or 15 year fixed rate products.

Source: http://www.mortgagenewsdaily.com/01302013_applications_volume.asp

Nat Criss is one of the owners of ForTheBestRate.com. Nat has an extensive background in mortgage finance, real estate, and online marketing. Nat was previously the Marketing Director for AAXA Discount Mortgage, a mortgage company which conducted business in 26 states, and currently helps run CMG Equities, LLC and ILM Marketing. My Google Profile+

Comments are closed.