Mortgage Applications Dip Slightly

February 1, 2012 (Chris Moore)

Mortgage application volume dipped slightly on a seasonally adjusted basis last week, but unadjusted, volume was nine percent higher than the previous week according to 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 which includes purchase applications and refinance applications, decreased a seasonally adjusted 2.9 percent from the previous week.

On an unadjusted basis, the Index increased 9.0 percent from the previous week. The four week moving average for the seasonally adjusted Market Index is up 4.11 percent.

Michael Fratantoni, MBA’s Vice President of Research and Economics, stated, “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. 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.”

Purchase Applications:

The seasonally adjusted Purchase Index decreased 1.7 percent from the previous week. The four week moving average is up 2.48 percent for the adjusted Purchase Index.

The unadjusted Purchase Index increased 17.1 percent compared with the previous week and was 4.3 percent lower than the same week a year ago.

Refinance Applications:

The Refinance Index decreased 3.6 percent from the previous week. The four week moving average for the Index is up 4.22 percent.

The refinance share of mortgage activity fell to 80.0 percent of total applications from 81.3 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)

4.09

4.11

0.41

0.47

Decreased

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

4.33*

4.39

0.41

0.40

Decreased

15-Year FRM

3.36

3.40

0.36

0.40

Decreased

FHA 30-Year

3.96

3.97

0.61

0.57

Increased

5/1 ARM

2.94

2.91

0.39

0.41

Increased

*Survey record low

The adjustable-rate mortgage (ARM) share of activity increased to 5.6 percent of total applications from 5.3 percent the previous week.

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

Sources:
Mortgage Bankers Association