WASHINGTON, D.C. – May 23, 2012 – (RealEstateRama) — 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.
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.
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.