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The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending April 15, 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 5.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 5.9 percent compared with the previous week.

The Refinance Index increased 2.7 percent from the previous week.  The four week moving average is down 5.7 percent.  The refinance share of mortgage activity decreased to 58.5 percent of total applications from 60.3 percent the previous week. This is the lowest refinance share since May 7, 2010.

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The seasonally adjusted Purchase Index increased 10.0 percent to its highest level since December 3, 2010, driven largely by a 17.6 percent increase in Government purchase applications. The unadjusted Purchase Index increased 10.9 percent compared with the previous week and was 11.4 percent lower than the same week one year ago. The four week moving average is up 2.5 percent.

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The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.83 percent from 4.98 percent, with points increasing to 1.07 from 0.93 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.07 percent from 4.17 percent, with points decreasing to 1.02 from 1.22 (including the origination fee) for 80 percent LTV loans. The effective rate also decreased from last week.

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"Purchase application volume jumped last week largely due to another sharp increase in applications for government loans. Borrowers were likely motivated to apply for loans before the scheduled increase in FHA insurance premiums," said Michael Fratantoni, MBA's Vice President of Research and Economics.  "Refinance activity increased somewhat, as rates dropped to their lowest level in a month towards the end of the week."

READ MORE: FHA Hikes Annual MIP Fee

SEE MORE: Visualizing the Mortgage Rate Rally

More from MND:

• MBS Commentary: MBS RECAP: Uneventful Session, MARKETS CLOSED MONDAY
• Mortgage Rate Watch: Mortgage Rates Reverse Course Every Day This Week, But Stay Near Lows
• MBS Commentary: MBS MID-DAY: Dying Down Ahead Of Long Weekend
• MND NewsWire: Federal Reserve Releases Action Plans for Two Loan Servicers
• MND NewsWire: Fannie and Freddie: "Where the Money Went."

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