Mortgage application volume loses ground

Mortgage applications down this week

According to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 22, 2012, mortgage applications decreased 7.1 percent from the week prior, losing gains made earlier in the month.

The Market Composite Index, a measure of mortgage loan application volume, decreased 7.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index also decreased 7.1 percent compared with the previous week.

The Refinance Index decreased 8 percent from the previous week. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased more than 2 percent compared with the previous week and was almost 3 percent lower than the same week one year ago.

“Refinance volume fell last week due largely to a fall-off in refinance applications for government loans, which had more than doubled the prior week,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “The large swings in activity were due to the implementation of FHA’s new premiums on streamline refinances, and borrowers timing their applications to lower their premiums.”

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The refinance share of mortgage activity decreased to 79 percent of total applications from over 80 percent the previous week. The adjustable-rate mortgage (ARM) share of activity is about 4 percent of total applications.

Average contract interest rates

• The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 3.88 percent from 3.87 percent, with points decreasing to 0.40 from 0.49 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. 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) increased to 4.12 percent from 4.06 percent, with points decreasing to 0.35 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
• The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.71 percent from 3.72 percent, with points decreasing to 0.46 from 0.47 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
• The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.24 percent from 3.25 percent, with points decreasing to 0.44 from 0.45 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
• The average contract interest rate for 5/1 ARMs increased to 2.81 percent from 2.75 percent, with points increasing to 0.41 from 0.33 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.