|Title: ||Record Low Mortgage Rates Lead to Jump in Refinance Activity|
WASHINGTON, D.C. (July 18, 2012) — Mortgage applications increased 16.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s
(MBA) Weekly Mortgage Applications Survey for the week ending July 13, 2012.
The Market Composite Index, a measure of mortgage loan application volume, increased 16.9 percent on a seasonally adjusted
basis from one week earlier. On an unadjusted basis, the Index increased 46 percent compared with the previous week. The
Refinance Index increased 22 percent from the previous week and is at the highest level since mid-June. The seasonally adjusted
Purchase Index decreased 0.1 percent from one week earlier. The unadjusted Purchase Index increased more than 25 percent compared
with the previous week and was 3 percent lower than the same week one year ago.
“Refinance application volume increased last week to near peak levels for the year as mortgage rates dropped to a new low,
driven down by growing concerns about the health of the US economy,” said Mike Fratantoni, MBA’s Vice President of Research
and Economics. “Applications for HARP refinance loans accounted for 24 percent of refinance activity last week, in line with
the HARP share for the past few weeks.”
The refinance share of mortgage activity increased to 80.1 percent of total applications, up from 77 percent the previous
week. The adjustable-rate mortgage (ARM) share of activity decreased to 4.1 percent of total applications.
In June, the number of both purchase and refinance applications increased the most in the West South Central region, with
a gain of 22.0 percent in purchase and 63.7 percent in refinance applications. The region with the smallest increase in purchase
applications was the New England region, growing by 9.4 percent while refinance applications increased the least in the Pacific
region with a gain of 30.9 percent.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased
to 3.74 percent, the lowest rate in the history of the survey, from 3.79 percent, with points increasing to 0.45 from 0.36
(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 3.98 percent, the lowest rate in the history of the survey, from 4.05 percent, with points decreasing to 0.32 from 0.34
(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 3.55 percent, the lowest
rate in the history of the survey, from 3.63 percent, with points increasing to 0.44 from 0.36 (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 decreased to 3.12 percent, the lowest rate in the history
of the survey, from 3.15 percent, with points increasing to 0.48 from 0.43 (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 remained unchanged at 2.71 percent, matching the lowest rate in the history
of the survey, with points increasing to 0.51 from 0.36 (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.