Mortgage Applications Rebound as Interest Rates Reach New Lows

September 14, 2011 (Chris Moore)

Buyers and refinancers took advantage of record low interest rates as mortgage applications for home purchases and refinancing rebounded last week according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 9, 2011.

The Market Composite Index, a measure of mortgage loan application volume, which includes purchase applications and refinance applications, increased a seasonally adjusted 6.3 percent from the previous week. This week’s seasonal adjustments account for the Labor Day holiday.

On an unadjusted basis, the Index decreased 15.4 percent compared with the previous week. The four week moving average for the seasonally adjusted Market Index is down 2.9 percent.

Purchase Applications:

The seasonally adjusted Purchase Index increased 7.0 percent from the previous week. The four week moving average is up 0.5 percent for the adjusted Purchase Index.

The unadjusted Purchase Index decreased 16.2 percent compared with the previous week, and is 7.2 percent lower than the same week one year ago.

Refinance Activity:

The Refinance Index increased for the first time in three weeks, gaining 6.0 percent from the previous week. The four week moving average is down 3.9 percent.

The refinance share of mortgage activity increased to 77.3 percent of total applications from 77.1 percent the previous week.

Mortgage Interest Rates:

30-year fixed-rate mortgage (FRM): The average contract interest rate reached a record low for the survey dating back to October 8, 2010 as interest rates decreased to 4.17 percent from 4.23 percent last week, with points decreasing to 0.97 from 1.04. The effective rate decreased from last week. The survey’s previous low was 4.21 percent.

15-year fixed-rate mortgage (FRM): The average contract interest rate reached a new survey low as interest rates decreased to 3.40 percent from 3.41 percent last week, with points increasing to 1.17 from 0.94. The effective rate increased from last week due to the increase in points.

Mortgage interest rates are based on 80 percent loan-to-value (LTV) ratio loans. Points include the origination fee.

ARMs:

The adjustable-rate mortgage (ARM) share of activity decreased to 6.9 percent of total applications from 7.1 percent the previous week.

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

Sources:
Mortgage Bankers Association