Applications Down for Third Week in MBA Weekly Survey

MBA (6/4/2008 ) Kemp, Carolyn
Mortgage application activity fell for the third consecutive week as key interest rates jumped back above 6 percent, the Mortgage Bankers Association reported today in its Weekly Mortgage Applications Survey for the week ending May 30.
The Market Composite Index fell to 502.3, a decrease of 15.3 percent on a seasonally adjusted basis from 593.3 one week earlier. On an unadjusted basis, the Index decreased 24.2 percent compared with the previous week and was down 20.3 percent compared with the same week one year earlier. The four-week moving average fell by 6 percent to 597.9 from 636.2. This week's results include an adjustment to account for the Memorial Day holiday.

The seasonally adjusted Refinance Index decreased 25.7 percent to 1496.1 from 2013.5 the previous week. The four-week moving average fell by 8.7 percent to 2035.6 from 2230.0. The refinance share of mortgage activity decreased to 40.6 percent of total applications from 46.1 percent the previous week.

The seasonally adjusted Purchase Index decreased by 5.4 percent to 333.6 from 352.7 one week earlier. The Conventional Purchase Index decreased by 6.1 percent while the Government Purchase Index (largely FHA) decreased by 3.3 percent. The four-week moving average fell by 3.3 percent to 354.3 from 366.2.

The average contract interest rate for 30-year fixed-rate mortgages increased to 6.17 percent from 5.96 percent, with points decreasing to 1.06 from 1.11 (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 5.70 percent from 5.49 percent, with points decreasing to 1.06 from 1.15 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year adjustable-rate mortgages decreased to 6.80 percent from 6.92 percent, with points increasing to 1.44 from 1.42 (including the origination fee) for 80 percent LTV loans. The ARM share of activity decreased to 8.7 percent from 9.3 percent of total applications from the previous week.

The survey covers 50 percent of all U.S. retail residential mortgage originations and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.