Mortgage Applications Decline Following Hurricane Sandy

By Stevie Duffin Updated on 12/14/2012

By Daniel Duffield

As a result of the fallout of Hurricane Sandy, mortgage applications decreased a noticeable 5% for the week ending on November 2, an industry trade group reported.

With many financial firms closed and borrower difficulties as a result of the storm, refinancing and purchase activity was greatly reduced, said the Mortgage Bankers Association (MBA). Considering each separately, home purchase dropped 7% from figures of the previous week, with the home refinancing index falling 5%.

According to Mike Fratantoni, the MBA’s vice president of research and economics, Hurricane Sandy had a substantial impact on mortgage application volume on the East Coast, falling 60% compared with the previous week in the state of New Jersey, declining nearly 50% in New York and almost 40% in Connecticut. Other states on the East Coast dropped during the week, though many states in other regions of the country saw mortgage application volume increases.

The 30-year fixed-rate mortgage (FRM) for conforming conventional loans dropped to 3.61% from the past week’s figure of 3.65%. Meanwhile, the 30-year jumbo FRM averaged 3.88%, declining from 3.94%.

For FHA loans, the 30-year FRM decreased slightly to 3.37% from 3.41%. Additionally, the 15-year FRM stayed fixed at 2.95%. In terms of adjustable-rate mortgages, the 5/1 ARM declined minimally to 2.61%.