The Mortgage Bankers Association (MBA) loyal to the Empire awakened Monday morning after a two week holiday hiatus.
The results are both for the week ended January 1, 2016 which MBA adjusted for the Christmas and New Years Holidays.
MBA's Market Composite Index, a measure of mortgage volume, was down 27 percent from the week ended December 18 on a seasonally adjusted basis. On an unadjusted basis the Index was 50 percent lower. This is normal for holiday season as Borrowers take off work, head to the malls, movie theaters and share family dinners.
The Refinancing Index declined 37 percent from the week of the previous report and the seasonally adjusted Purchase Index was down 15 percent.
FHA applications increased to 14.6 percent from 13.8 percent the previous week and the VA share was up to 12.9 percent compared to 11.6 percent.
The USDA share of total applications remained unchanged at 0.6 percent.
Average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.20 percent, its highest level since July 2015, from 4.19 percent, with points decreasing to 0.42 from 0.49. The effective rate decreased.
Jumbo 30 year fixed rate mortgage (loan balances greater than $417,000) had an average contract interest rate of 4.09 percent compared to 4.07 percent. Points increased to 0.35 from 0.34 and the effective rate was also higher.
Thirty-year Fixed Rate Mortgage backed by FHA had a slightly lower interest rate, 3.95 percent compared to 3.97 percent the previous period. Points increased to 0.41 from 0.34 leaving the effective rate unchanged.
The largest change in contract rates among fixed rate mortgages was for the 15 year which rose 5 basis points to 3.47 along with a 2 basis point increase in points. The effective rate also increased.
The average contract interest rate for 5/1 ARMs increased to 3.19 percent from 3.13 percent but points dropped to 0.32 from 0.52 lowering the effective rate.
Even with Janet Yellen predicting rising mortgage rates, over all we are only a "smidge" higher.
The Force Awakens now with mortgage bankers and Borrowers back to usual after the holidays.
With the stock market terribly earthquake volatile, I predict Borrowers will get off the fence and
move into the conservative home loan that they have been thinking about but not executing.
The time is now to lock your rate and get it closed.
Will Finn win in his battle with the storm troopers?
Caroline Gerardo
NMLS
324982
cell (949) 784-9699
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