The Mortgage Bankers Association (MBA) today released its Weekly Application Survey for the week ending December 17, 2010
.
The Mortgage Bankers Association application survey covers over 50%
of all US residential mortgage loan applications taken by mortgage
bankers, commercial banks, and thrifts. The data gives economists a look
into consumer demand for mortgage loans. In a low mortgage rate
environment, a trend of increasing refinance applications implies
consumers are seeking out a lower monthly payment which can increase
disposable income and consumer spending (or give consumers a chance to
pay down other debts like credit cards). A falling trend of purchase
applications indicates a decline in home buying interest, a negative for
the housing industry and the economy as a whole.
Excerpts From The Release...
The Market Composite Index, a
measure of mortgage loan application volume, decreased 18.6 percent on a
seasonally adjusted basis from one week earlier. On an unadjusted
basis, the Index decreased 20.0 percent compared with the
previous week. The four week moving average for the seasonally adjusted Market Index is down 9.8 percent.
The Refinance Index decreased 24.6 percent from the previous week. The Refinance Index has declined six straight weeks and
is at its lowest level since the week ending April 30, 2010. The four week moving average
is
down 1.2 percent. The refinance share of mortgage activity decreased to 72.3 percent of total applications from 76.7 percent the previous week.
This is the lowest refinance share observed in the survey since early June 2010.
The seasonally adjusted
Purchase Index decreased 2.5 percent
from one week earlier. The unadjusted Purchase Index decreased
4.9 percent compared with the previous week and was 8.4 percent
lower than the same week one year ago. The four week moving average is
down 1.2 percent
The average contract interest
rate for 30-year fixed-rate mortgages increased to 4.85 percent from
4.84 percent, with points
decreasing to 0.96 from 1.33 (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 increased to 4.22 percent from
4.21 percent, with points
decreasing to 1.19 from 1.28 (including the origination fee)
for 80 percent LTV loans. The effective rate decreased from last
week.
"Refinance application volume
dropped sharply this week as mortgage rates held near six month highs,"
said Michael Fratantoni,
MBA's Vice President of Research and Economics. "Purchase
applications fell for a second week, with the level of applications
little changed over the past month, indicating that home sales
are likely to remain relatively weak over the next few months."