June 1, 2011 (Chris Moore)
The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending May 27, 2011. The Market Composite Index, a measure of mortgage loan application volume, decreased 4.0 percent as purchase applications remained at about the same levels as the previous week and refinance applications decreased, even as interest rates for 30 year fixed rate mortgages continued to inch downward.
On an unadjusted basis, the Index decreased 4.2 percent compared with the previous week. The four week moving average for the seasonally adjusted Market Index is up 3.0 percent.
The seasonally adjusted Purchase Index remained unchanged from one week earlier. The four week moving average is up 1.1 percent for the seasonally adjusted Purchase Index. The unadjusted Purchase Index decreased 1.2 percent compared with the previous week and was 7.6 percent higher than the same week one year ago.
The Refinance Index decreased 5.7 percent from the previous week. The four week moving average is up 3.8 percent.
The refinance share of mortgage activity decreased to 65.7 percent of total applications from 66.8 percent last week.
“Interest rates fell last week as incoming economic data was weaker than anticipated. Despite this drop in rates, the number of refinance applications fell. In fact, the last time mortgage rates were this low, refinance volume was more than twenty percent higher. It is likely that many borrowers still cannot qualify to refinance given the lack of equity in their homes,” said Mike Fratantoni, MBA’s Vice President of Research and Economics.
The adjustable-rate mortgage (ARM) share of activity increased to 6.2 percent from 5.8 percent the previous week.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.58 percent from 4.69 percent last week, with points increasing to 1.01 from 0.69 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 3.78, with points increasing to 1.07 from 1.04 (including the origination fee) for 80 percent LTV loans. The effective rate increased slightly from last week.
Tags: MBA, home purchase applications, mortgage rates, fixed rate mortgage, adjustable rate mortgage, refinance, interest rate
Sources:
MBA