Record Low Rates Prompt Refi Surge, Buyers Stay Home

December 14, 2011 (Chris Moore)

Mortgage applications increased last week led by a surge in refinance activity as mortgage interest rates across the board hit record lows according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 9, 2011.

The Market Composite Index, a measure of mortgage loan application volume which includes purchase applications and refinance applications, increased a seasonally adjusted 4.1 percent from the previous week.

On an unadjusted basis, the Index increased 4.2 percent from the previous week. The four week moving average for the seasonally adjusted Market Index is up 0.65 percent.

Purchase Applications:

The seasonally adjusted Purchase Index decreased 8.2 percent from the previous week. The four week moving average is up 1.55 percent for the adjusted Purchase Index.

The unadjusted Purchase Index decreased 11.8 percent compared with the previous week and was 4.3 percent lower than the same week a year ago.

Refinance Applications:

The Refinance Index increased 9.3 percent from the previous week. The four week moving average for the Index is down 0.69 percent.

The refinance share of mortgage activity increased to 79.7 percent of total applications from 76.0 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)

4.12*

4.18

0.45

0.48

Decreased

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

4.47*

4.52

0.45

0.47

Decreased

15-Year FRM

3.44*

3.53

0.52

0.45

Decreased

FHA 30-Year

3.94*

3.98

0.68

0.52

Increased

5/1 ARM

2.93*

3.01

0.53

0.54

Decreased

* Record low

The adjustable-rate mortgage (ARM) share of activity decreased to 5.6 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