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Mortgage application volume up for first time in six weeks

For weeks, the volume of mortgage applications has fallen, but this week marks a shift in momentum, particularly with new home mortgage application volume.

Mortgage activity rose this week

After six consecutive weeks of declines, the Mortgage Bankers Association (MBA) is reporting that mortgage loan application volume is up 4.8 percent from the week prior and the refinance index is up 4.0 percent during the same period.

“Applications to buy a home picked up last week, and are running more than two percent above the level reported at this time last year. Home purchase applications for conventional loans are now about 10 percent above last year’s level,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “Applications for government loans increased by more than 10 percent over the week, for both purchase and refinance, likely spurred by borrowers seeking to apply before scheduled increases in FHA mortgage insurance premiums at the beginning of April.”

The seasonally adjusted Purchase Index increased 7.2 percent from one week earlier to its highest level since December 2, 2011. The unadjusted Purchase Index increased 7.6 percent compared with the previous week and was 2.4 percent higher than the same week one year ago.

The refinance share of mortgage activity fell to 71.2 percent of total applications, marking the lowest refinance share since July of 2011. Meanwhile, the adjustable-rate mortgage (ARM) share of activity rose slightly from 5.4 percent last week to 5.5 percent of all mortgage applications.

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In February 2012, among home purchase applications, 85.8 percent were for fixed-rate 30-year loans, 6.6 percent for 15-year fixed loans and 5.9 percent for ARMs. The share of purchase applications for “other” fixed-rate mortgages with amortization schedules other than 15 and 30-year terms was only 1.7 percent of all purchase applications.

Other stats from the MBA:

  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 4.16 percent from 4.23 percent, with points decreasing to 0.43 from 0.45 (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) decreased to 4.46 percent from 4.54 percent, with points increasing to 0.49 from 0.46 (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 3.89 percent from 3.96 percent, with points increasing to 0.58 from 0.52 (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 3.40 percent from 3.50 percent, with points decreasing to 0.41 from 0.42 (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 decreased to 2.93 percent from 3.00 percent, with points decreasing to 0.35 from 0.42 (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.

26 Comments

26 Comments

  1. Mike Woods from Carmel Indiana

    April 5, 2012 at 10:37 am

    I would be interested in knowing how the average 30 and 15-year mortgage rates compare to this same time last year. This would seem to be a confounding variable.

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