U.S. mortgage applications to purchase, refinance homes decreased 2.4% on seasonally adjusted basis in latest week, with Purchase Index hitting 15-year low: MBA
August 24, 2011
– Mortgage applications decreased 2.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending August 19, 2011.
The Market Composite Index, a measure of mortgage loan application volume, decreased 2.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2.9 percent compared with the previous week. The Refinance Index decreased 1.7 percent from the previous week. The seasonally adjusted Purchase Index decreased 5.7 percent from one week earlier and is at the lowest level in the survey since December 1996. The unadjusted Purchase Index decreased 7.3 percent compared with the previous week and was 7.3 percent lower than the same week one year ago.
“Another week of volatile markets and rampant uncertainty regarding the economy kept prospective homebuyers on the sidelines, with purchase applications falling to a 15-year low,” said Mike Fratantoni, MBA’s Vice President of Research and Economics. “This decline impacted borrowers across the board, with purchase applications for jumbo loans falling by more than 15 percent, and purchase applications for the government housing programs (FHA, VA, and USDA) falling by 8.2 percent. Although mortgage rates remain quite low, they increased over the week, bringing refinance application volumes down slightly.”
The four week moving average for the seasonally adjusted Market Index is up 6.9 percent. The four week moving average is down 2.6 percent for the seasonally adjusted Purchase Index, while this average is up 9.9 percent for the Refinance Index.
The refinance share of mortgage activity increased to 79.8 percent of total applications from 78.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.2 percent from 5.8 percent of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages increased to 4.39 percent from 4.32 percent, with points increasing to 0.88 from 0.86 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 3.56 percent from 3.47 percent, with points decreasing to 1.00 from 1.08 (including the origination fee) for 80 percent LTV loans. The effective rate also increased from last week.
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The survey covers over 50 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.
The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA's Web site: www.mortgagebankers.org.