As expected, superstorm Sandy in the northeast contributed to a 5% decline in mortgage application activity in the week ending Nov. 2. The Refinance Index fell 5% to 4244.3, while the Purchase Index was down 4.8% to 176.4.
“Last week’s storm had a significant impact on application volumes on the East Coast,” said Mike Fratantoni, Mortgage Bankers Association’s (MBA) vice president of research and economics. “Applications fell more than 60% compared to the prior week in New Jersey, almost 50% in New York and nearly 40% in Connecticut. Other East Coast states also saw declines over the week, while many states in other parts of the country had increases in application volumes.”
Refinancing activity has declined in the five weeks following its 3-1/2 year high of 5888 at the end of September and is also at its lowest level since the end of August. As a percent of total applications, refinancing share held steady at 80%. Of note, the MBA reported that the Home Affordable Refinance Program's (HARP) share of refinances ticked up to 27% from 25% in the prior week.
Mortgage rates dipped last week which contributed to those states outside the storm zone experiencing an increase in applications. The contract interest rate for 30-year fixed conforming loans averaged 3.61% versus 3.65% previously, while Federal Housing Administration rates fell four basis points to 3.37%.