Mortgage Applications Jump in Latest Week
Jan 25th, 2017 @ 9:02 PM by Amber Nelson
The MBA Market Composite Index, a measure of total mortgage loan application volume, climbed 4.0 percent from the previous week. Most of the increase was attributable to a jump in home purchase loan requests. The MBA Purchase Index increased 6 percent the week before, the highest peak in seven months. At the same time, the average loan size request for home purchases rose to $309,200, a five-week high.
“Although it is still early in the homebuying season, purchase activity remains on par with a year ago, suggesting that recent wage growth of nearly 3 percent is helping to offset the increase in interest rates. This trend is also consistent with other reports of homebuying activity,” said Lynn Fisher, MBA vice president of research and economics.
Refinance requests, on the other hand, made almost no change, with the Refinance Index inching up just 0.2 percent. Refinance applications made up 50.0 percent in the latest week, down from 53.0 percent a week earlier.
The first increase in mortgage interest rate in four weeks was likely the cause of the drop in refinance applications. The average interest rate on a 30-year conforming fixed-rate mortgage increased to 4.35 percent, up from 4.27 percent the week before, with points falling to 0.30 from 0.39.
Even with the recent rise, rates are still lower than they have been in a month. “While this was the first rate increase in January, rates remain about 10 basis points lower than four weeks ago,” said Fisher.
The popularity of federal FHA and VA loans increased in the latest week, with FHA applications making up 13.6 percent of all requests, up from 13.1 percent and VA loans accounting for12.2 percent, up from 12.1 percent. Adjustable-rate mortgage (ARM) loan application volume was unchanged at 5.7 percent of the total.
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.