Mortgage Applications in U.S. Increase in Mid-September

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According to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending September 12, 2014, mortgage applications increased 7.9 percent from one week earlier.

The Market Composite Index, a measure of mortgage loan application volume, increased 7.9 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 19 percent compared with the previous week.

The Refinance Index increased 10 percent from the previous week.  The seasonally adjusted Purchase Index increased 5 percent from one week earlier.  The unadjusted Purchase Index increased 14 percent compared with the previous week and was 10 percent lower than the same week one year ago.

"Application volume rebounded coming out of the Labor Day holiday, even as rates increased to their highest level in the last few months," said Mike Fratantoni, MBA's Chief Economist.  "Given the volatility in activity around the long weekend, it can be helpful to look at the change over a two week span: refinance applications are down 1.4 percent while purchase applications are up 2.1 percent.  Purchase volume continues to track almost ten percent behind last year's levels."

The refinance share of mortgage activity increased to 57 percent of total applications, the highest level since February 2014, from 55 percent the previous week.  The adjustable-rate mortgage (ARM) share of activity increased to 7.6 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.36 percent, the highest level since June 2014, from 4.27 percent, with points decreasing to 0.20 from  0.25 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.24 percent from 4.15 percent, with points decreasing to 0.16 from 0.23 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.03 percent from 3.97 percent, with points decreasing to 0.05 from 0.08 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.56 percent from 3.44 percent, with points decreasing to 0.25 from 0.28 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.19 percent from 3.12 percent, with points decreasing to 0.29 from 0.45 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.