July 6, 2011 (Chris Moore)
The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending July 1, 2011. The Market Composite Index, a measure of mortgage loan application volume, decreased 5.2 percent as refinance activity plummeted due to rising interest rates.
On an unadjusted basis, the Index decreased 5.1 percent compared with the previous week. The four week moving average for the seasonally adjusted Market Index is down 0.5 percent.
The seasonally adjusted Purchase Index increased 4.8 percent from one week earlier. The four week moving average is up 0.8 percent for the seasonally adjusted Purchase Index. The unadjusted Purchase Index increased 4.4 percent compared with the previous week, and is 11.7 percent higher than the same week one year ago.
“Stronger economic data towards the end of the week coupled with the end of the Fed’s second round of quantitative easing helped bring mortgage rates to their highest level in over a month,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “Refinance activity, already constrained by a smaller pool of eligible borrowers, declined in response to the higher rates, but purchase applications picked up appreciably in the week before the July 4th holiday.”
The Refinance Index decreased 9.2 percent from the previous week. The four week moving average is down 1.1 percent.
The refinance share of mortgage activity decreased to 66.4 percent of total applications from 69.5 percent last week.
The adjustable-rate mortgage (ARM) share of activity increased to 6.1 percent from 5.8 percent the previous week.
The average contract interest rate for 30-year fixed-rate mortgages increased to 4.69 percent from 4.46 percent last week, with points decreasing to 0.90 from 1.19 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 3.79 percent from 3.64 percent last week, with points decreasing to 0.88 from 1.11 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
Tags: MBA, home purchase applications, mortgage rates, fixed rate mortgage, adjustable rate mortgage, refinance, interest rate