WASHINGTON (2/12/15)--Volatility continues to hound mortgage application activity into 2015, as the composite index of the Mortgage Bankers Association's mortgage application survey dropped 9% this week after the massive gains seen earlier in the year (Economy.com Feb. 11).
Retreats in both refinance and purchase activity, dropping 10.3% and 6.5% respectively, helped fuel the decline.
"One month into 2015 and there is little sign of a consistent recovery in mortgage purchase applications," said Michael McGrane, Moody's analyst (Economy.com).
McGrane added that while refinancing has increased significantly over the last month, the refinance index sits 40% below levels seen in the second quarter of 2013 when the Federal Reserve began winding down quantitative easing.
Despite the step back for purchase applications, the purchase index remains 15.6% higher on a monthly basis and 2.9% above its year-ago pace.
The 30-year fixed-rate mortgage rate climbed 5 basis points during the week to 3.84%, according to the survey. On a monthly basis, however, the rate has fallen 5 basis points, and sits 61 basis points below its year-ago level.
Further, the contract rate for 30-year fixed-rate jumbo mortgages jumped 8 basis points to 3.9%, and the five-year adjustable-rate mortgage rate rose 4 basis points to 3.07%.
The National Association of Realtors (NAR) also reported Wednesday that the majority of metropolitan areas recorded a faster pace of price growth in the final quarter of 2014.
Driven by a decline in supply and an increase in demand, the median existing single-family home price climbed in 86% of markets. The national median existing single-family home price in the quarter came in at $208,700, according to NAR. That's a 6% increase year-over-year.