WASHINGTON, D.C. – February 1, 2012 – (RealEstateRama) — Mortgage applications decreased 2.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 27, 2012.
The Market Composite Index, a measure of mortgage loan application volume, decreased 2.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 9.0 percent compared with the previous week. The Refinance Index decreased 3.6 percent from the previous week. The seasonally adjusted Purchase Index decreased 1.7 percent from one week earlier. The unadjusted Purchase Index increased 17.1 percent compared with the previous week and was 4.3 percent lower than the same week one year ago.
The four week moving average for the seasonally adjusted Market Index is up 4.11 percent. The four week moving average is up 2.48 percent for the seasonally adjusted Purchase Index, while this average is up 4.22 percent for the Refinance Index.
The refinance share of mortgage activity decreased to 80.0 percent of total applications from 81.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.6 percent from 5.3 percent of total applications from the previous week.
“The Federal Reserve surprised the market last week by indicating that short-term rates were likely to stay at their current low-levels until the end of 2014. Longer-term treasury rates dropped in response, and mortgage rates for the week were down slightly as a result,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. Fratantoni continued, “Although total application volume dropped on an adjusted basis relative to last week, refinance volume remains high, with survey participants reporting that the expanded Home Affordable Refinance Program (HARP) contributed to roughly 10 percent of their refinance activity.”
In December 2011, Connecticut had the largest increase in refinance applications, increasing by 80.1 percent from November. Maine saw a 30.8 percent increase in applications for home purchase, which was the largest state-increase in applications for home purchase. Only 12 states had a decrease in home purchase activity in December, while every state in the US saw an increase in refinance volume.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 4.09 percent from 4.11 percent, with points decreasing to 0.41 from 0.47 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.33 percent from 4.39 percent, with points increasing to 0.41 from 0.40 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. This is the lowest 30-year jumbo rate since MBA started tracking the series in January 2011. The effective rate also decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.96 percent from 3.97 percent, with points increasing to 0.61 from 0.57 (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 decreased to 3.36 percent from 3.40 percent, with points increasing to 0.41 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate also decreased from last week.
The average contract interest rate for 5/1 ARMs increased to 2.94 percent from 2.91 percent, with points decreasing to 0.39 from 0.41 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also increased from last week.
If you would like to purchase a subscription of MBA’s Weekly Applications Survey, please visit www.mortgagebankers.org/WeeklyApps, contact ">
The survey covers over 75 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.
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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.
