Press Release - Weekly Application Survey


Title: Sharp Jump in Purchase Activity Led by Applications for FHA Loans in Latest MBA Weekly Survey
Source:   MBA
Date: 10/6/2010

WASHINGTON, D.C. (October 6, 2010) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending October 1, 2010.  The Market Composite Index, a measure of mortgage loan application volume, decreased 0.2 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 0.3 percent compared with the previous week.

The Refinance Index decreased 2.5 percent from the previous week.  The seasonally adjusted Purchase Index increased 9.3 percent from one week earlier and is the highest Purchase Index observed in the survey since the week ending May 7, 2010. The unadjusted Purchase Index increased 9.1 percent compared with the previous week and was 34.7 percent lower than the same week one year ago.

“The increase in purchase activity was led by a 17.2 percent increase in FHA applications, while conventional purchase applications also increased by 3.6 percent,” said Jay Brinkmann, MBA’s Chief Economist. “This is the second straight weekly increase in purchase applications and the highest Purchase Index level since the expiration of the homebuyer tax credit program. One possible driver of last week’s big increase in FHA applications was a desire by borrowers to get applications in before new FHA requirements took effect October 4th, which included somewhat higher credit score and down payment requirements.”
 
The four week moving average for the seasonally adjusted Market Index is down 3.0 percent.  The four week moving average is up 2.0 percent for the seasonally adjusted Purchase Index, while this average is down 4.2 percent for the Refinance Index.

The refinance share of mortgage activity decreased to 78.9 percent of total applications from 80.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.1 percent from 6.0 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.25 percent from 4.38 percent, with points decreasing to 1.00 from 1.01 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The 30-year contract rate is the lowest recorded in the survey, with the previous low being the rate observed last week.  The effective rate also decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.73 percent from 3.77 percent, with points increasing to 1.14 from 1.13 (including the origination fee) for 80 percent LTV loans. The 15-year contract rate is the lowest recorded in the survey, while the previous low was observed last week.  The effective rate also decreased from last week.

The average contract interest rate for one-year ARMs increased to 7.11 percent from 7.04 percent, with points increasing to 0.24 from 0.22 (including the origination fee) for 80 percent LTV loans.

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

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.mba.org.