The Mortgage Bankers Association (MBA) today released its Weekly
Mortgage Applications Survey for the week ending March 18, 2011.
The MBA's loan application survey covers over 50% of all U.S. residential mortgage
loan applications taken by mortgage bankers, commercial banks, and thrifts. The
data gives economists a snapshot view of consumer demand for mortgage loans. In
a falling mortgage rate environment, a trend of increasing refinance
applications implies consumers are seeking out lower monthly payments. If
consumers are able to reduce their monthly mortgage payment and increase
disposable income through refinancing, it can be a positive for the economy as
a whole (may boost consumer spending. Also allows debtors to pay down personal
liabilities faster). A trend of declining purchase applications implies home
buyer demand is shrinking.
Excerpts from the Release...
The Market Composite Index, a measure of mortgage loan application volume,
increased 2.7 percent on a seasonally adjusted basis from one week
earlier. On an unadjusted basis, the Index increased 2.8 percent compared
with the previous week.
The Refinance Index increased 2.7 percent from the previous week. The four
week moving average is up 3.3 percent. The
refinance share of mortgage activity remained constant at 66.4 percent of total
applications.
The seasonally adjusted Purchase Index increased 2.7 percent from one week
earlier. The unadjusted Purchase Index increased 3.0 percent compared with the
previous week and was 15.3 percent lower than the same week one year ago. The
four week moving average is up 1.0 percent.
The average contract interest rate
for 30-year fixed-rate mortgages increased to 4.80 percent from 4.79 percent,
with points decreasing to 0.96 from 1.07 (including the origination fee) for 80
percent loan-to-value (LTV) ratio loans. The effective rate decreased
from last week.
The average contract interest rate
for 15-year fixed-rate mortgages decreased to 4.02 percent from 4.03 percent,
with points increasing to 0.90 from 0.85 (including the origination fee) for 80
percent LTV loans. The effective rate increased from last week.
"Recently lower mortgage rates have done little to motivate potential refinance candidates." said MND's Managing Editor Adam Quinones. "This isn't a big surprise as most qualified borrowers simply don't have an incentive to refinance because they already did last year when rates were near record lows. Other than that, qualification issues continue to prevent many folks from lowering their monthly payment. We do however expect a modest increase in purchase activity heading into the spring buying season."