Mortgage application volume slips despite falling interest rates

Mortgage application volume down

According to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Sept. 14, 2012, mortgage application volume decreased 0.2 percent from the week prior. The Market Composite Index, a measure of mortgage loan application volume, decreased 0.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 24 percent compared with the previous week, which included the Labor Day holiday.

The Refinance Index increased one percent from the previous week. The HARP 2.0 share of refinance applications was 22 percent this past week. The seasonally adjusted Purchase Index decreased four percent from one week earlier. The unadjusted Purchase Index increased 18 percent compared with the previous week and was 8 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 81 percent of total applications from 80 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.0 percent of total applications.

Historically low interest rates

1. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 3.72 percent, the lowest rate in the history of the survey, from 3.75 percent, with points increasing to 0.45 from 0.44 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
2. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 3.99 percent from four percent, with points increasing to 0.35 from 0.30 (including the origination fee) for 80 percent LTVs. The effective rate increased from last week.
3. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 3.50 percent, matching the lowest rate in the history of the survey, with points increasing to 0.57 from 0.43 (including the origination fee) for 80 percent LTVs. The effective rate increased from last week.
4. The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.03 percent, the lowest rate in the history of the survey, from 3.07 percent, with points increasing to 0.39 from 0.38 (including the origination fee) for 80 percent LTVs. The effective rate decreased from last week.
5. The average contract interest rate for 5/1 ARMs decreased to 2.61 percent, the lowest rate in the history of the survey, from 2.63 percent, with points decreasing to 0.32 from 0.47 (including the origination fee) for 80 percent LTVs. The effective rate decreased from last week.