The Refinance Index increased 17.0 percent from the previous week. This third consecutive increase marks the highest Refinance Index recorded in the survey since October 2009. The seasonally adjusted Purchase Index decreased 3.3 percent from one week earlier and is the lowest Purchase Index observed in the survey since April 1997. The unadjusted Purchase Index decreased 4.0 percent compared with the previous week, was down 27.1 percent over the past 4 weeks, and was 27.5 percent lower than the same week one year ago.

“Refinance application volume jumped last week as continuing financial market turmoil related to the budget crises in Europe extended the opportunity for homeowners to lock in at historically low mortgage rates,” said Michael Fratantoni, MBA’s Vice President of Research and Economics.  “In contrast, purchase applications fell further this week, following last week’s sharp decline, keeping the purchase index at 13-year lows.”
 
The four week moving average for the seasonally adjusted Market Index is up 4.4 percent.  The four week moving average is down 7.2 percent for the seasonally adjusted Purchase Index, while this average is up 11.5 percent for the Refinance Index.

The refinance share of mortgage activity increased to 72.2 percent of total applications from 68.1 percent the previous week, which is the highest refinance share observed in the survey since December 2009. The adjustable-rate mortgage (ARM) share of activity decreased to 6.0 percent from 6.3 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.80 percent from 4.83 percent, with points remaining constant at 1.08 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.  This is the lowest 30-year fixed-rate recorded in the survey since the week ending November 27, 2009. The effective rate also decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 4.25 percent from 4.19 percent, with points decreasing to 1.00 from 1.36 (including the origination fee) for 80 percent LTV loans. However, due to the decrease in points, the effective rate decreased from last week.

The average contract interest rate for one-year ARMs increased to 6.83 percent from 6.81 percent, with points increasing to 0.38 from 0.37 (including the origination fee) for 80 percent LTV loans.

If you would like to subscribe to MBA’s Weekly Applications Survey, please contact MBA Research at (202) 557-2830 or mbaresearch@mortgagebankers.org or click here.

Media inquiries should be directed to Carolyn Kemp at (202) 557-2727 or ckemp@mortgagebankers.org.

The survey covers over 50 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990.  Respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990=100.

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The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA's Web site:  www.mortgagebankers.org.