Low Mortgage Rates Push Mortgage Applications Up

February 8, 2012 (Chris Moore)

Mortgage applications jumped last week as another round of record low interest rates led to a surge in refinance activity according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 3, 2012.

The Market Composite Index, a measure of mortgage loan application volume which includes purchase applications and refinance applications, increased a seasonally adjusted 7.5 percent from the previous week.

On an unadjusted basis, the Index increased 8.7 percent from the previous week. The four week moving average for the seasonally adjusted Market Index is up 4.88 percent.

Purchase Applications:

The seasonally adjusted Purchase Index increased 0.1 percent from the previous week. The four week moving average is up 0.65 percent for the adjusted Purchase Index.

The unadjusted Purchase Index increased 6.0 percent compared with the previous week and was 4.1 percent lower than the same week a year ago.

Refinance Applications:

The Refinance Index increased 9.4 percent from the previous week. The four week moving average for the Index is up 5.72 percent.

The refinance share of mortgage activity increased to 80.5 percent of total applications from 80.0 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)

4.05*

4.09

0.44

0.41

Decreased

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

4.29*

4.33

0.43

0.41

Decreased

15-Year FRM

3.33*

3.46

0.37

0.40

Decreased

FHA 30-Year

3.89*

3.96

0.78

0.61

Decreased

5/1 ARM

2.91

2.94

0.40

0.39

Decreased

*Survey Low

The adjustable-rate mortgage (ARM) share of activity increased to 6.0 percent of total applications from 5.6 percent the previous week.

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

Sources:
Mortgage Bankers Association