Refinance Applications Increase as Rates Drop to 2011 Lows in Latest MBA Weekly Survey

Refinance Applications Increase as Rates Drop to 2011 Lows in Latest MBA Weekly Survey

WASHINGTON, D.C. – December 14, 2011 – (RealEstateRama) — Mortgage applications increased 4.1 percent from one week earlier, driven by a surge in refinance applications, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 9, 2011.

The Market Composite Index, a measure of mortgage loan application volume, increased 4.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 4.2 percent compared with the previous week. The Refinance Index increased 9.3 percent from the previous week to its highest level since November 4, 2011. The seasonally adjusted Purchase Index decreased 8.2 percent from one week earlier. The unadjusted Purchase Index decreased 11.8 percent compared with the previous week and was 4.3 percent lower than the same week one year ago.

The four week moving average for the seasonally adjusted Market Index is up 0.65 percent. The four week moving average is up 1.55 percent for the seasonally adjusted Purchase Index, while this average is up 0.69 percent for the Refinance Index.

The refinance share of mortgage activity increased to 79.7 percent of total applications from 76.0 percent the previous week. This is the highest refinance share since this year. The adjustable-rate mortgage (ARM) share of activity decreased to 5.6 percent from 5.7 percent of total applications from the previous week.

For the month of November, purchase applications decreased in all loan categories except for loan amounts greater than $729,000 which saw a 1.9 percent increase in applications from last month. Loans that were $150,000 or less had 10.7 percent fewer applications over the month, while applications for loans between $150,000 and $300,000 decreased 8.9 percent, and applications for loans between $300,000 and $417,000 decreased 8.6 percent. Of the higher balance loans, the category for loans between $417,000 and $625,000 had a 6.0 percent decrease in applications and the number of applications for loans between $625,000 and $729,000 decreased 5.2 percent over the month.

However, compared to the same month last year, the largest decrease in applications was for the $625,000 and $729,000 loan category, which fell 20.2 percent. Applications for loans between $150,000 and $300,000 and those between $300,000 to $417,000 dropped by 1.2 percent and 9.8 percent, respectively. Gaining the most from last year were applications for loan amounts $150,000 or less, which rose 9.8 percent, while applications for loans greater than $729,000 increased by 5.1 percent. The $417,000 to $625,000 category grew 0.6 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 4.12 percent, the lowest rate this year, from 4.18 percent, with points decreasing to 0.45 from  0.48 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also 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 4.47 percent, the lowest rate this year, from 4.52 percent, with points decreasing to 0.45 from 0.47 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA  decreased to 3.94 percent, the lowest rate this year, from 3.98 percent, with points increasing to 0.68 from 0.52 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.44 percent, the lowest rate this year, from 3.53 percent, with points increasing to 0.52 from 0.45 (including the origination fee) for 80 percent LTV loans. The effective rate also decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.93 percent, the lowest rate this year, from 3.01 percent, with points decreasing to 0.53 from 0.54 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also decreased from last week.

If you would like to purchase a subscription of MBA’s Weekly Applications Survey, please visit www.mortgagebankers.org/WeeklyApps, contact "> 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.

Please note that as a result of MBA offices being closed Monday, December 26, 2011 through Monday, January 2, 2012, the Weekly Applications Survey results will not be released on December 28 for the week ending December 23, 2011. Release of the survey will resume on Wednesday, January 4, 2012 at 7:00 a.m. with results for the two weeks prior.

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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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MBA

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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