Mortgage Applications Fall as Refi Activity Slumps

November 30, 2011 (Chris Moore)

Low interest rates couldn’t overcome the Thanksgiving holiday and Black Friday as mortgage refinance applications plummeted last week according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 25, 2011.

The Market Composite Index, a measure of mortgage loan application volume which includes purchase applications and refinance applications, decreased a seasonally adjusted 11.7 percent from the previous week. Last week’s results include an adjustment for the Thanksgiving holiday.

On an unadjusted basis, the Index decreased 39.0 percent from the previous week. The four week moving average for the seasonally adjusted Market Index is down 3.29 percent.

Purchase Applications:

The seasonally adjusted Purchase Index decreased 0.8 percent from the previous week. The four week moving average is up 2.37 percent for the adjusted Purchase Index.

The unadjusted Purchase Index decreased 33.7 percent compared with the previous week and was 18.2 percent lower than the same week a year ago.

Refinance Applications:

The Refinance Index decreased 15.3 percent from the previous week. The four week moving average for the Index is down 4.92 percent.

The refinance share of mortgage activity declined to 73.9 percent of total applications from 75.9 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)

4.21

4.23

0.49

0.46

Decreased

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

4.55

4.59

0.45

0.40

Decreased

15-Year FRM

3.58

3.58

0.45

0.53

Decreased

FHA 30-Year

4.00

4.05

0.62

0.55

Decreased

5/1 ARM

2.98

3.00

0.47

0.49

Decreased

The adjustable-rate mortgage (ARM) share of activity increased to 5.8 percent of total applications from 5.7 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