Press Release - Weekly Application Survey


Title: Mortgage Rates Drop to Another 2011 Low in Latest MBA Weekly Survey
Source:   MBA
Date: 12/21/2011

WASHINGTON, D.C. (December 21, 2011) — Mortgage applications decreased 2.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 16, 2011. 

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2.8 percent compared with the previous week. The Refinance Index decreased 1.6 percent from the previous week. The seasonally adjusted Purchase Index decreased 4.9 percent from one week earlier. The unadjusted Purchase Index decreased 7.5 percent compared with the previous week and was 6.9 percent lower than the same week one year ago.

The four week moving average for the seasonally adjusted Market Index is up 0.26 percent. The four week moving average is down 1.53 percent for the seasonally adjusted Purchase Index, while this average is up 1.32 percent for the Refinance Index.

“Continued anxiety surrounding the fragile economic situation in Europe led interest rates lower last week. However, refinance applications fell slightly, and purchase applications dropped further as we head into the end of the year,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “Remarkably low rates are not enough, as many homeowners continue to hold back due to lack of equity in their properties, poor credit and a weak job market.”

The refinance share of mortgage activity reached a high this year of 80.7 percent of total applications from 79.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to a low this year of 5.1 percent from 5.6 percent of total applications from the previous week.

The average loan size of all loans for home purchase in the US was $217,774 in November 2011, up from $213,430 in October 2011. The average loan size for a refinance increased from $217,153 in October to $220,523 in November. The average government purchase loan size declined from October to November, from $186,263 to $170,742. The largest purchase loans were made in the Pacific region at $308,307. The largest refinance loans were also made in the Pacific region at $304,509.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.08 percent, the lowest rate this year, from 4.12 percent, with points increasing to 0.49 from  0.45 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.44 percent, the lowest rate this year,  from 4.47 percent, with points decreasing to 0.37 from 0.45 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA  decreased to 3.93 percent, the lowest rate this year, from 3.94 percent, with points decreasing to 0.63 from 0.68 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.39 percent, the lowest rate this year, from 3.44 percent, with points decreasing to 0.40 from 0.52 (including the origination fee) for 80 percent LTV loans. The effective rate also decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.90 percent, the lowest rate this year, from 2.93 percent, with points decreasing to 0.46 from 0.53 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also decreased from last week.

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 75 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.

Please note that as a result of MBA offices being closed Monday, December 26, 2011 through Monday, January 2, 2012, the Weekly Applications Survey results will not be released on December 28 for the week ending December 23, 2011. Release of the survey will resume on Wednesday, January 4, 2012 at 7:00 a.m. with results for the two weeks prior.

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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.