WASHINGTON, D.C. – February 29, 2012 – (RealEstateRama) — Mortgage applications decreased 0.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 24, 2012. This week’s results are adjusted for the Presidents Day holiday.
The Market Composite Index, a measure of mortgage loan application volume, decreased 0.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 9.4 percent compared with the previous week. The Refinance Index decreased 2.2 percent from the previous week. The seasonally adjusted Purchase Index increased 8.2 percent from one week earlier. The unadjusted Purchase Index increased 0.9 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 0.33 percent. The four week moving average is down 0.96 percent for the seasonally adjusted Purchase Index, while this average is up 0.64 percent for the Refinance Index.
The refinance share of mortgage activity decreased to 77.9 percent of total applications from 80.1 percent the previous week. This is the lowest refinance share since December 2, 2011, and the first time the measure has fallen below 80 percent since December 9, 2011. The adjustable-rate mortgage (ARM) share of activity decreased to 5.0 percent from 5.3 percent of total applications from the previous week.
“Mortgage rates remained near survey lows last week, but refinance volume fell slightly,” said Michael Fratantoni, Vice President of Research and Economics at the Mortgage Bankers Association. Fratantoni continued, “According to survey participants, more than 20 percent of refinance applications were for HARP loans. The HARP share of total refinance applications has increased over the past month. Purchase application volume increased over the week, but remains within the narrow and anemic range of activity we have seen since the expiration of the homebuyer tax credit in May 2010.”
In January 2012, among home purchase applications, 86.4 percent were for fixed-rate 30-year loans, 6.5 percent for 15-year fixed loans and 5.4 percent for ARMs. The share of purchase applications for “other” fixed-rate mortgages with amortization schedules other than 15 and 30-year terms was 1.7 percent of all purchase applications. The share of 15-year fixed and ARM decreased from the previous month while the 30-year fixed and “other” fixed category shares increased from last month.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 4.07 percent from 4.09 percent, with points decreasing to 0.51 from 0.53 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. This is the lowest 30-year fixed rate since February 3, 2012. 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 4.34 percent from 4.32 percent , with points decreasing to 0.40 from 0.42 (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 3.86 percent from 3.87 percent , with points increasing to 0.80 from 0.41 (including the origination fee) for 80 percent LTV loans. This is the lowest FHA rate of the year. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.36 percent from 3.38 percent, with points increasing to 0.38 from 0.37 (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 decreased to 2.78 percent from 2.94 percent , with points decreasing to 0.38 from 0.44 (including the origination fee) for 80 percent LTV loans. This is the lowest 5/1 ARM rate since MBA began tracking the series in January 2011. The effective rate decreased 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.