Post-Holiday Bump in Mortgage Applications as Rates Drop

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By Trey Thoelcke Published
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The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a increase of 11.9% in the group’s seasonally adjusted composite index. The previous week’s results included an adjustment for the New Year’s holiday.

The seasonally adjusted purchase index increased by 12.0% from the prior week’s report, but it is at a similar level to that observed in mid-November 2013. On an unadjusted basis, the composite index increased by 61% week-over-week. The unadjusted purchase index increased by 66% for the week, but it is 10% lower year-over-year.

The MBA’s refinance index increased by 11%. But the share of refinancings fell by one point, totaling 62% of all applications. Adjustable rate mortgage loans accounted for 8.0% of all applications, unchanged from the prior week.

The average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 4.72% to 4.66%. The rate for a jumbo 30-year fixed-rate mortgage fell from 4.66% to 4.58%. That was the first week-on-week decline in 30-year mortgage rates in 10 weeks. The average interest rate for a 15-year fixed-rate mortgage fell from 3.77% to 3.72%.

The contract interest rate for a 5/1 adjustable rate mortgage loan decreased from 3.33% to 3.28%.

This surprise increase in purchase applications could signal a strong spring season, now that the holidays are over. Mortgage bankers have been concerned that the new mortgage rules that took effect last Friday would knock some potential borrowers out of the market. Earlier this week, the MBA lowered its forecast on 2014 mortgage originations by $7 billion to $1.12 trillion, based on declining mortgage application activity and rising interest rates.

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About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.

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