Mortgage Apps Pull Back From Multi-Year Highs

by devteam June 27th, 2012 | Share

Mortgagernapplication volume as measured by the Mortgage Bankers Association’s (MBA) MarketrnComposite Index fell 7.1 percent during the week ended June 22. The change wasrnthe same for both seasonally adjusted and unadjusted data.  Responses to MBA’s Weekly MortgagernApplications Survey send the Refinance Index down 8 percent from the week endedrnJune 15 and the refinancing share of mortgage activity decreased from 80 percent of total applicationsrnto 79 percent.  The seasonallyrnadjusted Purchase Index was down 1 percent from a week earlier while thernunadjusted index decreased 2 percent week-over-week and 3 percent from a yearrnearlier.</p

“Refinance volume fellrnlast week due largely to a fall-off in refinance applications for governmentrnloans, which had more than doubled the prior week,” said Michael Fratantoni,rnMBA’s Vice President of Research and Economics.  “The large swings inrnactivity were due to the implementation of FHA’s new premiums on streamlinernrefinances, and borrowers timing their applications to lower their premiums.”</p

“The decline in the refi index isn’t particularly troubling considering the past two weeks saw the highest levels since early 2009,” says Mortgage News Daily’s Matthew Graham.  “The pop higher in apps was fueled not only by the drop in FHA MIPs</b on June 11th, but also by fresh record low rates, as well as the announcements by several big box lenders that they'd no longer be accepting open access (or "different servicer") streamline applications.  These factors not only helped concentrate application volume in the previous two cycles, but the pull-back in open access availability</b likely weighs on the current cycle as it raised new hurdles for some borrowers, or at the very least, decreased the market's overall capacityrn to churn out streamlines.  Bottom line: this week's drop makes sense."</p

Purchase Index vs 30 Yr Fixed</b</p

ChartManager.loadChart(‘purchaseappschart’, ‘PurchaseMtgAppChart’);


Refinance Index vs 30 Yr Fixed</p

ChartManager.loadChart(‘refiappschart’, ‘RefiMtgAppChart’);


Interest rates werernmixed.  The contract rate for the mostrnpopular product, the conforming (loan balance of $417,500 or less) 30-yearrnfixed-rate mortgage (FRM)   Jumbo 30-year FRM, (balances over $417,500)rnincreased to 4.12 percent with 0.35 point from 4.06 percent with 0.38 point andrnthe effective rate increased as well.   </p

The average contractrninterest rate for 15-year fixed-rate mortgages decreased to 3.24 percent fromrn3.25 percent, with points decreasing to 0.44 fromrn0.45. The effective rate decreased from the previous week.</p

The average contractrninterest rate for 30-year fixed-rate mortgages backed by the FHA decreased torn3.71 percent from 3.72 percent, with points decreasing to 0.46 from 0.47. Thernaffective rate decreased.</p

Adjustable raternmortgages (ARMs) had a 4 percent share of mortgage applications filed duringrnthe week.  The average contract interestrnrate for 5/1 ARMs increased to 2.81 percent from 2.75 percent, withrnpoints increasing to 0.41 from 0.33. Therneffective rate increased from last week.</p

All interest ratesrnquoted are for loans with an 80 percent loan-to-value ratio and points include thernorigination fee.  </p

 MBA’s survey covers over 75 percent of all U.S. retail residentialrnmortgage applications, and has been conducted weekly since 1990. rnRespondents include mortgage bankers, commercial banks and thrifts.  The base period and value for all indexes isrnMarch 16, 1990+100.

All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of is prohibited.

About the Author


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

See all blogs


Leave a Comment

Leave a Reply

Latest Articles

Real Estate Investors Skip Paying Loans While Raising Billions

By John Gittelsohn August 24, 2020, 4:00 AM PDT Some of the largest real estate investors are walking away from Read More...

Late-Stage Delinquencies are Surging

Aug 21 2020, 11:59AM Like the report from Black Knight earlier today, the second quarter National Delinquency Survey from the Read More...

Published by the Federal Reserve Bank of San Francisco

It was recently published by the Federal Reserve Bank of San Francisco, which is about as official as you can Read More...