Mortgage Applications Down In MBA Weekly Survey

MBA (6/18/2008 ) Kemp, Carolyn
Mortgage application activity fell for the fourth time in five weeks as key interest rates rose sharply, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending June 13.
The Market Composite Index fell to 508.4, a decrease of 8.7 percent on a seasonally adjusted basis from 557.1 one week earlier. On an unadjusted basis, the Index decreased by 9.6 percent compared with the previous week and was down by 21.3 percent compared with the same week one year earlier. The four-week moving average fell by 5 percent to 540.3 from 568.6.

The seasonally adjusted Refinance Index fell sharply, decreasing by 15 percent to 1378.6 from 1622.1 the previous week. The four-week moving average fell by 11.3 percent to 1627.6 from 1835.6. The refinance share of mortgage activity decreased to 37.4 percent of total applications from 39.8 percent the previous week.

The seasonally adjusted Purchase Index decreased by 4.3 percent to 360.2 from 376.2 one week earlier. The Conventional Purchase Index decreased by 7.2 percent, while the Government Purchase Index (largely FHA) increased by 4 percent. The four-week moving average, however, rose by 0.5 percent to 355.7 from 353.8.

The average contract interest rate for 30-year fixed-rate mortgages increased to 6.57 percent from 6.24 percent, with points decreasing to 1.10 from 1.12 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The 30-year rate is at its highest level since July 13 of last year.

The average contract interest rate for 15-year fixed-rate mortgages increased to 6.14 percent from 5.78 percent, with points decreasing to 1.10 from 1.12 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year adjustable-rate mortgages increased to 7.22 percent from 6.87 percent, with points increasing to 1.56 from 1.42 (including the origination fee) for 80 percent LTV loans. The ARM share of activity decreased to 9.7 percent from 10.3 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.