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Bulk of recent mortgage applications were for refinancing

Posted on Wednesday, August 12, 2015 at 3:43:44 PM

Driven by refinances, mortgage application volumes ticked up very slightly in the week ending on Aug. 7, 2015. 

Data from the Mortgage Bankers Association's Weekly Mortgage Applications Survey indicated that the organization's Market Composite Index, a gauge of mortgage loan application volume, bumped up 0.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index slid down 1 percent. 

The Market Composite Index is composed of two separate indices measuring different sorts of applications. The Refinance Index rose 3 percent to its highest level since May 2015. Meanwhile, the seasonally adjusted Purchase Index fell 4 percent, while the unadjusted Purchase Index also dropped 4 percent. Still, it is up 20 percent year-over-year. 

Refinancing has been a popular residential financing option for many borrowers. The share of mortgage applications dedicated to refinancing jumped to 53.1 percent of total applications from 51.3 percent last week. This represents the highest refinance share since April 2015. 

Application volumes ticked up slightly as interest rates remained relatively flat from week-to-week. The question of if, and when, the Federal Reserve will raise the benchmark interest rate, and how that will affect future application volumes, remains a concern in the housing market, as current rates continue to hover at exceptionally low levels.