Interest Rates Fall, Mortgage Applications Still Decline

August 30, 2012 (Chris Moore)

Applications for mortgages fell for the fourth consecutive week as a decline in refinance applications far outweighed the modest increase in purchase applications according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 24th, 2012.

The Market Composite Index, a measure of mortgage loan application volume including purchase applications and refinance applications, declined for the fourth consecutive week falling a seasonally adjusted 4.3 percent from the previous week and follows a 7.4 percent decline the week before.

On an unadjusted basis, the Index fell by five percent from the previous week and follows a eight percent decline two weeks ago.

Purchase Applications:

The seasonally adjusted Purchase Index increased by just over one percent from the previous week after increasing by just under one percent the week before, while the unadjusted Purchase Index declined by one percent.

Refinance Applications:

The Refinance Index fell another six percent from the previous week after declining by nine percent the week before. The refinance share of mortgage activity fell to 79 percent of total applications from 80 percent the previous week.

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)

3.80

3.86

0.42

0.42

Decreased

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

4.06

4.11

0.34

0.42

Decreased

15-Year FRM

3.12

3.15

0.44

0.44

Decreased

FHA 30-Year

3.60

3.62

0.48

0.50

Decreased

5/1 ARM

2.68*

2.74

0.36

0.38

Decreased

*Survey Record Low

The adjustable-rate mortgage (ARM) share of activity remained at just over four percent of total applications.

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

Sources:
Mortgage Bankers Association