Mortgage Application Volume Falls Despite Lower Rates

by devteam September 7th, 2011 | Share

The Mortgage Bankers Association (MBS)rnhas released its Weekly Mortgage Applications Survey for the week endingrnSeptember 2, 2011.  MBA’s seasonallyrnadjusted Market Composite Index, a measure of loan application volume, was downrnfor the third consecutive week, decreasing 4.9 percent from the Index duringrnthe week ended August 236.  On anrnunadjusted basis the Index was down 5.3 percent. </p

The Refinancing Index decreased 6.3rnpercent from one week ago while the seasonally adjusted Purchase Index inchedrnup 0.2 percent.  The unadjusted  Purchase Index, however, was down 2.1 percentrnfrom the previous week and was 13.5 percent lower than one week earlier.</p


“Headingrninto the Labor Day weekend, the 30-year rate was at its second lowest level inrnthe history of our survey (the low point was reached last October), and thern15-year rate marked a new low in our survey,” said Mike Fratantoni, MBA’srnVice President of Research and Economics. “Despite these rates however,rnrefinance application volume fell for the third straight week, and is more thanrn35 percent below levels at this time last year. Purchase application volumernremains relatively flat at extremely low levels, close to lows last seen inrn1996.”</p

Allrnthree of the moving averages were down from the previous week.  The seasonally adjusted Market Index andrnPurchase Index were lost 3.2 percent and 3.7 percent respectively; thernRefinance Index declined 3.1 percent.</p

The refinancernshare of mortgage activity fell for the second week in a row from a record 79.8rnpercent during the week ended August 19. rnThe share last week was 77.8 percent, this week it is 77.1 percent ofrntotal applications. Adjustable rate mortgages (ARMs) garnered a 7.1 percentrnshare of mortgage volume, essentially unchanged from the previous week. </p

Thernaverage contract interest rate for 30-year fixed-rate mortgages (FRM) decreasedrnto 4.23 percent from 4.32 percent with points, including the origination fee,rndecreasing from 1.29 points to 1.04. rnThis is the second lowest rate in the history of the survey.  The contract rate for 15-year FRMs was downrnfrom 3.49 percent with 1.0 point to 3.41 percent with 0.94 point.  The effective rate of both types of loansrnalso decreased.  All quotes are for 80rnpercent loan-to-value ratio mortgages.</p

MBA’s surveyrncovers over 50 percent of U.S. retail residential mortgage applications. Respondentsrninclude mortgage bankers, commercial banks and thrifts.  Base period andrnvalue for all indexes is March 16, 1990=100.</p

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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