Press Release - Weekly Application Survey


Title: Record Low Mortgage Rates Lead to Jump in Refinance Activity
Source:   MBA
Date: 7/18/2012

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 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.