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Market
Refis boost weekly mortgage volume
WASHINGTON (1/23/14)--Mortgage refinancing boosted overall industry activity for the week ending Jan. 17, according to Mortgage Bankers Association data published Wednesday.
 
The MBA refinance index was up 9.9%, driving the overall composite index up by 4.7%. A measure of purchase activity was down by 3.6%.
 
Homeowners are being encouraged to refinance by lower mortgage interest rates (Economy.com Jan. 22). The average rate for 30-year fixed mortgages fell by nine basis points to 4.57%--a seven-week low and 0.07 percentage points lower on a monthly basis. The average rates for 30-year fixed jumbo mortgages and five-year adjustable mortgages fell by one basis point and five basis points to end the week at 4.57% and 3.23%.
 
Refinance applications accounted for 64% of all activity and 57% of prospective loan volume, while the adjustable-rate mortgage share of activity was down 1% to 7% of all applications.
 
Long-run measures of mortgage market activity still show the industry in a bit of a rough patch, despite the MBA composite index's third straight week of advancement. A four-week moving average of the refinance activity is down by 5% on a monthly basis and 65% on a year-over-year measurement. A similar gauge of the purchase index is up by 1% on a monthly basis, but down 7.5% from a year ago.
 
Thirty-year fixed-rate mortgage interest rates and five-year adjustable-rate mortgages are both up on a year-over-year basis, by 95 basis points and 62 basis points respectively.
 
Moody's said that conditions unfavorable to first-time homebuyers are holding back purchase activity. Student debt is a major contributing factor to this, according to a recent quarterly report published by the New York Fed, with 90-day student loan delinquency rates up to 11.8% for the third quarter of 2013, despite declining delinquency rates in other credit markets. The Fed also found that the percentages of 90-day student loan delinquencies has almost doubled since the start of the Great Recession.
 
A 12-week moving average of the purchase index is at 182.1, its lowest level since March 2012. A measure of that purchase index not seasonally adjusted was 15% lower on a year-over-year basis.


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