Even as interest rates on residential loans surged to the highest level in more than two years, refinance share of mortgage applications widened.
A seasonally adjusted 4 percent decline from one week previous was recorded for the Market Composite Index for the week ended Dec. 9.
Foregoing seasonal adjustments, the index — a measure of mortgage loan application volume — was down 5 percent on a week-over-week basis.
The Mortgage Bankers Association determined the index based on its Weekly Mortgage Applications Survey, which was reported Wednesday.
The trade group said that applications for refinances fell 4 percent from the week ended Dec. 2. The drop in refinance activity came despite that refinance share widened to 57.2 percent from 56.2 percent in the last survey. But the share was more narrow than 60.7 percent in the same week last year.
Applications for purchase financing retreated a seasonally adjusted 3 percent from the the previous week.
Without seasonal adjustments, purchase business tumbled 7 percent from a week earlier, though it was up 2 percent from a year earlier.
MBA reported that applications for loans insured by the Federal Housing Administration made up 11.6 percent of total applications, more than 11.3 percent a week prior. FHA share has thinned considerably, though, from 14.0 percent a the same week a year ago.
The latest report had applications for mortgages guaranteed by the Department of Veterans Affairs representing 11.9 percent of total applications. VA share thinned from 12.6 percent
but widened from 11.2 percent twelve months earlier.
At 4.28 percent, MBA said that the average contract interest rate for 30-year fixed-rate conforming mortgages was the highest it’s been since October 2014.
Jumbo interest rates were a basis point more than conforming rates. The jumbo-conforming spread swung from a negative
5 BPS the previous week and a negative 13 BPS a year previous.
Applications for adjustable-rate mortgages accounted for 6.2 percent of total applications. ARM share
widened from 6.0 percent in the prior report and in the report for the week ended Dec. 11, 2015.