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Housing News

Mortgage application volume slides this week

Mortgage application volume is an indicator that is used to determine interest in real estate purchases and refinance levels as a measure of economic health in housing.

mortgage contract

mortgage contract

Mortgage application volume

Mortgage applications decreased 4.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 10, 2012.

The Market Composite Index, dropped 4.5 percent on a seasonally adjusted basis from one week earlier, while on an unadjusted basis, the Index fell 4.7 percent compared with the previous week. The Refinance Index decreased 5.0 percent from the previous week. The seasonally adjusted Purchase Index decreased 2.0 percent from one week earlier. The unadjusted Purchase Index decreased 3.0 percent compared with the previous week.

The refinance share of mortgage activity decreased slightly from the previous week and is about 81 percent of total applications. Refinance applications have accounted for roughly 80.0 percent of all activity in recent years and has not strayed too far from that mark. The adjustable-rate mortgage (ARM) share of activity is almost 4.0 percent of total applications.

Interest rates this week

Although up slightly in the past two weeks, interest rates continue to be at historic lows. According to the MBA:

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  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) remained unchanged at 3.76 percent, with points increasing to 0.47 from 0.46 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.03 percent from 4.04 percent, with points decreasing to 0.27 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.53 percent from 3.54 percent, with points remaining unchanged at 0.49 (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 increased to 3.12 percent from 3.08 percent, with points decreasing to 0.40 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
  • The average contract interest rate for 5/1 ARMs increased to 2.73 percent from 2.72 percent, with points decreasing to 0.36 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

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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