PhotoApplications for mortgages rose for a second consecutive week as contract interest rates headed downward.

Data from the Mortgage Bankers Association (MBA) shows that applications surged 10% in the week ending April 8.

“Helped by a persistently strong job market and low rates, applications for both conventional and government home purchase loans increased last week,” said MBA Chief Economist Mike Fratantoni. “The purchase index was at its second highest level since May 2010. Applications to refinance also increased as the 30-year contract rate decreased to its lowest level since January 2015.”

The Refinance Index jumped 11% from the previous week to its highest level since February, with the refinance share of mortgage activity increasing to 54.9% of total applications from 54.5% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5% of total applications.

The FHA share of total applications dipped to 10.8% from 11.3% the week prior, the VA share dropped from 12.2% to 11.9%, and the USDA share of total applications was unchanged at 0.8%.

Contract interest rates

  • The average contract interest rate for 30-year fixed-rate mortgages (FRMs) with conforming loan balances ($417,000 or less) slipped four basis points -- from 3.86% to 3.82%, with points increasing to 0.33 from 0.32 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. This is the lowest since January 2015. The effective rate decreased from last week.
  • The average contract interest rate for 30-year FRMs with jumbo loan balances (greater than $417,000) dipped to 3.74% from 3.76% percent, with points increasing to 0.31 from 0.27 (including the origination fee) for 80% LTV loans. This is the lowest rate since February 2016. The effective rate decreased from last week.
  • The average contract interest rate for 30-year FRMs backed by the FHA fell seven basis points to 3.66%, with points decreasing to 0.29 from 0.36 (including the origination fee) for 80% LTV loans. This is the lowest rate since April 2015. The effective rate decreased from last week.
  • The average contract interest rate for 15-year FRMs was unchanged at 3.10%, with points steady at 0.37 (including the origination fee) for 80% LTV loans. The effective rate was unchanged from last week.
  • The average contract interest rate for 5/1 ARMs was 2.94%, with points decreasing to 0.2 from 0.26 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The survey covers over 75% of all U.S. retail residential mortgage applications.


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