Government Loans Fuel Mortgage Applications

October 12, 2011 (Chris Moore)

Mortgage applications for home purchases and refinances nudged up last week driven mostly by increases in government loans according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 7, 2011.

The Market Composite Index, a measure of mortgage loan application volume, which includes purchase applications and refinance applications, increased a seasonally adjusted 1.3 percent from the previous week.

On an unadjusted basis, the Index also increased 1.3 percent compared with the previous week. The four week moving average for the seasonally adjusted Market Index is up 1.56 percent.

Mortgage applications were mainly driven by government loans with the Government Purchase Index up 2.4 percent and the Government Refinance Index up 9.9 percent from the previous week while the Conventional Purchase Index increased only 0.1 percent and the Conventional Refinance Index increased only 0.2 percent.

Purchase Applications:

The seasonally adjusted Purchase Index increased 1.1 percent from the previous week. The four week moving average is down 0.51 percent for the adjusted Purchase Index.

The unadjusted Purchase Index increased 1.2 percent compared with the previous week and was 2.9 percent lower than the same week a year ago.

Refinance Activity:

The Refinance Index increased 1.3 percent from the previous week while the four week moving average for the Index is up 2.15 percent.

The refinance share of mortgage activity was unchanged from last week at 79.1 percent of total applications.

Mortgage Interest Rates:

Average Contract Mortgages Rates
(80% loan-to-value)

Type of
Loan

Interest Rate (%)

Points

Effective Rate

Current

Previous

Current

Previous

30-Year FRM Conforming
($417,500 or less)

4.25

4.18

0.47

0.44

Increased

30-Year FRM Non-Conforming
($417,501 or more)

4.59

4.49

0.49

0.41

Increased

15-Year FRM

3.53

3.49

0.45

0.45

Increased

FHA 30-Year

4.06

4.05

0.58

0.69

Decreased

5/1 ARM

3.03

3.02

0.54

0.41

Increased

The adjustable-rate mortgage (ARM) share of activity decreased to 6.0 percent of total applications from 6.4 percent the previous week.

This week’s results are based on an enhanced sample which captures more than 75% of all retail and consumer direct channel mortgage applications, compared to 50% previously.

Tags: MBA, home purchase applications, mortgage rates, fixed rate mortgage, adjustable rate mortgage, refinance, interest rate

Sources:
Mortgage Bankers Association