|Title: ||Record Low Mortgage Rates Fuel Third Consecutive Increase In Refinance Applications In Latest MBA Weekly Survey|
WASHINGTON, D.C. (May 23, 2012) — Mortgage applications increased 3.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending
May 18, 2012.
The Market Composite Index, a measure of mortgage loan application volume, increased 3.8 percent on a seasonally adjusted
basis from one week earlier. On an unadjusted basis, the Index increased 3.3 percent compared with the previous week. The
Refinance Index increased 5.6 percent from the previous week. This is the third consecutive weekly increase in the Refinance
Index which is at its highest level since February 10, 2012. The seasonally adjusted Purchase Index decreased 3.0 percent
from one week earlier to its lowest level since April 20, 2012. The unadjusted Purchase Index decreased 3.6 percent compared
with the previous week and was 4.2 percent lower than the same week one year ago.
“Continuing negative developments in the sovereign debt crisis in Europe, particularly in Greece and Spain, as well as the
recent French elections, which have shifted political power in a manner that will likely show less support for European austerity,
helped push the US 10 Year Treasury yield below 1.7 percent last week,” said Michael Fratantoni, MBA’s Vice President of Research
and Economics. “Mortgage rates again dipped to new record lows in the survey, which spurred more borrowers back into the
refinance market. As a result, applications for refinance loans have increased for the third straight week and are at the
highest level since February of this year. The HARP share of refinance applications was essentially unchanged over the week
at 28 percent, so it was not the primary driver of the increase over the previous week.”
The four week moving average for the seasonally adjusted Market Index is up 3.72 percent. The four week moving average is
up 0.17 percent for the seasonally adjusted Purchase Index, while this average is up 4.83 percent for the Refinance Index.
The refinance share of mortgage activity increased to 76.6 percent of total applications from 74.9 percent the previous week.
This is the highest refinance share since March 2, 2012. The adjustable-rate mortgage (ARM) share of activity decreased to
5.0 percent from 5.4 percent of total applications from the previous week. The government purchase share decreased over the
week from 36.3 percent to 36.2 percent of all purchase applications. This is the second lowest government purchase share
since March 27, 2009.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased
to 3.93 percent, the lowest rate in the history of the survey, from 3.96 percent, with points increasing to 0.39 from 0.37
(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) increased
to 4.25 percent from 4.20 percent, with points increasing to 0.42 from 0.36 (including the origination fee) for 80 percent
LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.73 percent, the lowest
rate in the history of the survey, from 3.75 percent, with points decreasing to 0.57 from 0.66 (including the origination
fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 3.26 percent, the lowest rate in
the history of the survey, from 3.26 percent, with points increasing to 0.42 from 0.41 (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 increased to 2.83 percent from 2.80 percent, with points increasing to 0.42
from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
If you would like to purchase a subscription of MBA’s Weekly Applications Survey, please visit www.mortgagebankers.org/WeeklyApps, contact email@example.com 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
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.