Mortgage Applications Decrease as Rate Jump Suppresses Refinance Activity in Latest MBA Weekly Survey

WASHINGTON, D.C. (August 12, 2009) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending August 7, 2009.  The Market Composite Index, a measure of mortgage loan application volume decreased 3.5 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 3.7 percent compared with the previous week and increased 16.1 percent compared with the same week one year earlier.

The seasonally adjusted Purchase Index increased 1.1 percent – the third, albeit small, gain in the last four weeks.  The Refinance Index decreased 7.2 percent, resulting from the increase in the average 30 year fixed mortgage rate and reversing the 7.2 percent increase in the prior week.
 
The four week moving average for the seasonally adjusted Market Index is down 0.7 percent.  The four week moving average is down 2.0 percent for the Refinance Index.  For the seasonally adjusted Purchase Index, this average is up 0.8 percent and is nearly eight percent above its recent low at the end of February.  The behavior of the four week moving average of the Purchase Index is consistent with the view that home sales hit bottom earlier this year and are now in a gradual recovery.

The refinance share of mortgage activity decreased to 52.3 percent of total applications from 54.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.8 percent from 5.4 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages increased to 5.38 percent from 5.17 percent, with points increasing to 1.18 from 1.02 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages increased to 4.71 percent from 4.60 percent, with points increasing to 1.20 from 1.00 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year ARMs increased to 6.71 percent from 6.67 percent, with points decreasing to 0.08 from 0.09 (including the origination fee) for 80 percent LTV loans.

**SPECIAL NOTES**

The index values are no longer included in MBA’s Weekly Applications Survey press release, only the percentage changes.  If you would like to subscribe to MBA’s Weekly Applications Survey, please contact MBA Research at (202) 557-2830 or mbaresearch@mortgagebankers.org or click here.

Media inquiries should be directed to Carolyn Kemp at (202) 557-2727 or ckemp@mortgagebankers.org.

The survey covers over 50 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.