Purchase Applications Up in Latest MBA Survey. Refi Demand Down Again

by devteam November 24th, 2010 | Share

The Mortgage Bankers Association today released its Weekly Mortgage Applications Survey for the week ending November 19th, 2010.  </p

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 viewrn of 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. If consumers are ablern to reduce their monthly mortgage payment and increase disposable incomern through refinancing, it can be a positive for the economy as a whole (creates more consumer spending or allows debtors to pay down personal liabilities like credit cards). A falling trend of purchase applicationsrn indicates a decline in home buying demand, a negative for the housing industry and the economy as a whole.</p

Excerpts from the Release…</p

The Market Composite Index, a measure of mortgage loan application volume, increased 2.1 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 1.1 percent compared with the previous week.</p

The Refinance Index decreasedrn 1.0 percent from the previous week and is the lowest Refinance Index observed since the endrn of June.  The four week moving average is down 4.8 percent for the Refinance Index. The refinance share of mortgage activity decreased to 78.6 percent of total applications from 80.3 percent the previous week.</p


The seasonally adjusted Purchase Index increased 14.4rn percent from one week earlier, which included Veterans Day.rn No adjustment was made for the holiday. On a seasonally adjusted basis, this is the highest Purchase Index recorded sincern the week ending May 7, 2010. The unadjusted Purchase Index increased 9.6 percent compared with the previous week and was 7.4rn percent lower than the same week one year ago. The four week moving average is up 4.0 percent for the seasonally adjusted Purchase Index.</p


The average contract interest rate for 30-year fixed-rate mortgages increased to 4.50 percentrn from 4.46 percent, with pointsrn decreasing to 0.88 from 1.12 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.  This is thern highest 30-year fixed rate observed in the survey since the week ending September 3, 2010.   The effective rate decreasedrn from last week.rn </p

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.83 percent from 3.87 percent, with pointsrn increasing to 1.04 from 0.91 (including the origination fee) for 80 percent LTV loans. The effective rate was unchanged fromrn last week.</p


Michael Fratantoni, MBA’s Vice President of Research and Economics said…</p

“The increase in purchase applications last week aligns with other incoming data suggesting that consumers are feeling somewhat more confident with their financial situation. While the increase was magnified somewhat by the comparison to the holiday week, the level of purchase applications on a seasonally adjusted basis is now at its highest level since the expiration of the homebuyer tax credit.”

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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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