Mortgage Applications Increase in MBA Weekly Survey

MBA (7/2/2008 ) Kemp, Carolyn
A drop in interest rates helped spur an uptick in mortgage application activity, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending June 27.
The Market Composite Index rose to 477.7, an increase of 3.6 percent on a seasonally adjusted basis from 461.3 one week earlier. On an unadjusted basis, the Index increased 3.2 percent compared with the previous week but fell by 22.8 percent compared with the same week one year earlier. The four-week moving average fell by 1.2 percent to 501.1 from 507.3.

The seasonally adjusted Refinance Index increased by 4.7 percent to 1269.2 from 1212.2 the previous week. The four-week moving average fell by 4 percent to 1370.5 from 1427.2. The refinance share of mortgage activity increased to 36.8 percent of total applications from 36.3 percent the previous week.

The seasonally adjusted Purchase Index increased by 2.8 percent to 342.8 from 333.4 one week earlier. The Conventional Purchase Index increased by 2.6 percent while the Government Purchase Index (largely FHA) increased by 3.4 percent. The four-week moving average rose by 0.7 percent to 353.2 from 350.8.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 6.33 percent from 6.39 percent, with points decreasing to 1.09 from 1.12 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.90 percent from 5.95 percent, with points decreasing to 1.02 from 1.16 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year adjustable-rate mortgages increased to 7.14 percent from 7.09 percent, with points decreasing to 0.31 from 1.59 (including the origination fee) for 80 percent LTV loans. The ARM share of activity remained unchanged from last week at 8.5 percent of total applications.

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.