Press Release - Weekly Application Survey


Title: Refinance Applications Increase in Latest MBA Weekly Survey
Source:   MBA
Date: 5/16/2012

WASHINGTON, D.C. (May 16, 2012)Mortgage applications increased 9.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 11, 2012. 

The Market Composite Index, a measure of mortgage loan application volume, increased 9.2 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 8.7 percent compared with the previous week.  The Refinance Index increased 13.0 percent from the previous week.  The seasonally adjusted Purchase Index decreased 2.4 percent from one week earlier. The unadjusted Purchase Index decreased 2.4 percent compared with the previous week and was 1.0 percent lower than the same week one year ago.

The four week moving average for the seasonally adjusted Market Index is up 1.77 percent.  The four week moving average is up 1.57 percent for the seasonally adjusted Purchase Index, while this average is up 1.88 percent for the Refinance Index.

The refinance share of mortgage activity increased to 74.9 percent of total applications from 72.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.4 percent from 5.7 percent of total applications from the previous week.

“A flare up of the sovereign debt troubles in Europe once again led investors to flee to the safety of US Treasury securities last week.  As a result, mortgage rates have reached new lows in our survey, and refinancing application volumes picked up substantially as a result,” said Michael Fratantoni, MBA’s Vice President of Research and Economics.    “Survey participants indicated that this was not due primarily to HARP volume – the HARP share of refinances fell to 28 percent of refinance applications, down relative to last week and last month, when the share was just above 30 percent in April.  The increase in refinance activity last week was concentrated in the conventional sector, which was up around 14 percent for the week, while government refinance applications were up only 4 percent.”

During the month of April, the investor share of applications for home purchase was at 5.7 percent, unchanged from March.  The Pacific region has the largest investor share of applications for home purchase at 9.5 percent. In addition, the share of purchase mortgages for second homes decreased to 5.7 percent in April from 5.8 percent in March.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 3.96 percent, the lowest rate in the history of the survey, from 4.01 percent, with points decreasing to 0.37 from  0.41 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.20 percent, the lowest rate in the history of the survey, from 4.29 percent, with points remaining unchanged at 0.36 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.75 percent, the lowest rate in the history of the survey, from 3.81 percent, with points increasing to 0.66 from 0.45 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.26 percent, the lowest rate in the history of the survey, from 3.29 percent, with points increasing to 0.41 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.80 percent from 2.83 percent, with points increasing to 0.37 from 0.36 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.

If you would like to purchase a subscription of MBA’s Weekly Applications Survey, please visit www.mortgagebankers.org/WeeklyApps, contact 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.

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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.