Mortgage Applications Decrease in Latest MBA Weekly Survey

WASHINGTON, D.C. – December 22, 2010 – (RealEstateRama) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending December 17, 2010. The Market Composite Index, a measure of mortgage loan application volume, decreased 18.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 20.0 percent compared with the previous week.

The Refinance Index decreased 24.6 percent from the previous week. The Refinance Index has declined six straight weeks and is at its lowest level since the week ending April 30, 2010. The seasonally adjusted Purchase Index decreased 2.5 percent from one week earlier. The unadjusted Purchase Index decreased 4.9 percent compared with the previous week and was 8.4 percent lower than the same week one year ago.

“Refinance application volume dropped sharply this week as mortgage rates held near six month highs,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “Purchase applications fell for a second week, with the level of applications little changed over the past month, indicating that home sales are likely to remain relatively weak over the next few months.”

The four week moving average for the seasonally adjusted Market Index is down 9.8 percent. The four week moving average is down 1.2 percent for the seasonally adjusted Purchase Index, while this average is down 12.7 percent for the Refinance Index.

The refinance share of mortgage activity decreased to 72.3 percent of total applications from 76.7 percent the previous week. This is the lowest refinance share observed in the survey since early June 2010. The adjustable-rate mortgage (ARM) share of activity increased to 6.1 percent from 5.5 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages increased to 4.85 percent from 4.84 percent, with points decreasing to 0.96 from 1.33 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 4.22 percent from 4.21 percent, with points decreasing to 1.19 from 1.28 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

Please note that as a result of MBA offices being closed Monday, December 27 through Friday, December 31, the Weekly Applications Survey results will not be released on December 29 for the week ending December 24, 2010. Release of the survey will resume on Wednesday, January 5, 2011 at 7 AM with results for the two weeks prior.

If you would like to purchase a subscription of MBA’s Weekly Applications Survey, please contact MBA Research at (202) 557-2830 or or click here.

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.

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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.mortgagebankers.org.

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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 2,400 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.

Contact:

Mortgage Bankers Association
1331 L Street, NW
Washington, DC 20005

Phone: (202) 557-2700

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