Mortgage Applications Decline Slightly as FHA Refi’s Surge

June 21, 2012 (Chris Moore)

Mortgage applications fell slightly last week as applications to purchase homes fell but were countered by a slight increase in refinance applications which was by bolstered by a surge in FHA refinance applications according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 15th, 2012.

The Market Composite Index, a measure of mortgage loan application volume including purchase applications and refinance applications, fell a seasonally adjusted 0.8 percent from the previous week.

On an unadjusted basis, the Index decreased over one percent from the previous week.

Purchase Applications:

The seasonally adjusted Purchase Index suffered a decrease of nine percent from the previous week.

The unadjusted Purchase Index decreased over nine percent compared with the previous week and was two percent lower than the same week a year ago.

Refinance Applications:

The Refinance Index increased one percent from the previous week. The refinance share of mortgage activity increased to 81 percent of total applications from 78 percent the previous week.

FHA refinance activity surged to an all-time high, more than double the amount from the previous week, while conventional and HARP refinance volume declined.

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)

3.87*

3.88

0.49

0.43

Decreased

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

4.06*

4.12

0.38

0.41

Decreased

15-Year FRM

3.25

3.23

0.45

0.48

Increased

FHA 30-Year

3.72

3.71

0.59

0.47

Increased

5/1 ARM

2.75*

2.78

0.33

0.49

Decreased

*Record Survey Low

The adjustable-rate mortgage (ARM) share of activity fell to almost 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