|Title: ||Mortgage Refinance Applications Jump as Rates Continue to Fall in Latest MBA Weekly Survey|
WASHINGTON, D.C. (October 13, 2010) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending October
8, 2010. The Market Composite Index, a measure of mortgage loan application volume, increased 14.6 percent on a seasonally
adjusted basis from one week earlier. On an unadjusted basis, the Index increased 14.8 percent compared with the previous
The Refinance Index increased 21.0 percent from the previous week. The seasonally adjusted Purchase Index decreased 8.5 percent
from one week earlier. The unadjusted Purchase Index decreased 8.3 percent compared with the previous week and was 37.1 percent
lower than the same week one year ago.
“After five weeks of steadily declining rates to yet another new low, borrowers who had been on the fence jumped off, which
factored into refinance activity surging more than 20 percent,” said Michael Fratantoni, MBA’s Vice President of Research
and Economics. “Refinance application volumes are now close to the highest level this year. Purchase activity remains generally
weak, but applications for conventional purchase mortgages are now at their highest level since the beginning of May following
the expiration of the tax credit.”
“Last week saw a big jump in applications for FHA loans to purchase homes. We surmised that this was due to potential buyers
wanting to beat the stricter FHA standards that went into effect October 4th. This conjecture was confirmed by the fact that
this week FHA applications fell back to a level closer to the average seen over the past four months, ”continued Fratantoni.
The four week moving average for the seasonally adjusted Market Index is up 3.0 percent. The four week moving average is
down 0.3 percent for the seasonally adjusted Purchase Index, while this average is up 3.9 percent for the Refinance Index.
The refinance share of mortgage activity increased to 83.1 percent of total applications from 78.9 percent the previous week
and is the highest refinance share since January 2009. The adjustable-rate mortgage (ARM) share of activity decreased to 5.4
percent from 6.1 percent of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.21 percent from 4.25 percent, with points
increasing to 1.02 from 1.00 (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, while the previous low was observed last week. The effective rate also decreased
from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.62 percent from 3.73 percent, with points
decreasing to 1.06 from 1.14 (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 decreased to 7.03 percent from 7.11 percent, with points increasing to
0.27 from 0.24 (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 firstname.lastname@example.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
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.