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Housing News

Mortgage application volume down 3.8 percent

After weeks of improvement, and a week of backsliding, mortgage application volume continues to edge up, then slip backward and the refinance share of mortgage activity continues to decrease week by week.

Mortgage application volume slides

Two weeks ago, mortgage application volume fell, ending weeks of increases, then last week, volume rose again, overcoming the temporary setback. According to the Mortgage Banker’s Association (MBA), the week ending April 20, 2012 saw a 3.8 percent decrease from the week prior, marking a bumpy road toward improvement.

The refinance share of mortgage activity decreased to 73.4 percent of total applications from 75.2 percent the previous week and the adjustable-rate mortgage (ARM) share of activity increased to 5.6 percent from 5.3 percent of total applications from the week prior. Within refinance applications taken in March 2012, 58.8 percent were for fixed-rate 30-year loans, 23.1 percent for 15-year fixed loans and 5.2 percent for ARMs.

Mortgage interest rate trends

According to the MBA:

  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 4.04 percent from 4.05 percent, with points decreasing to 0.40 from 0.45 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. This is the lowest 30-year fixed interest rate recorded in the history of the survey. The effective rate decreased from last week.
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.27 percent from 4.36 percent, with points increasing to 0.44 from 0.36 (including the origination fee) for 80 percent LTV loans. This is the lowest 30-year jumbo interest rate recorded since MBA started tracking the series in January 2011. The effective rate decreased from last week.
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.81 percent from 3.83 percent, with points decreasing to 0.52 from 0.61 (including the origination fee) for 80 percent LTV loans. This is the lowest FHA interest rate recorded in the history of the survey. The effective rate decreased from last week.
  • The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.32 percent from 3.33 percent, while points remained unchanged at 0.41 (including the origination fee) for 80 percent LTV loans. This is the lowest 15-year fixed interest rate recorded in the history of the survey. The effective rate decreased from last week.
  • The average contract interest rate for 5/1 ARMs decreased to 2.81 percent from 2.83 percent, with points increasing to 0.37 from 0.35 (including the origination fee) for 80 percent LTV loans. This is the lowest 5/1 ARM interest rate since March 2, 2012. The effective rate decreased from last week.

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Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

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