Mortgage Applications Up for Third Straight Week

MBA (7/16/2008 ) Kemp, Carolyn
Mortgage applications rose for the third consecutive week as key interest rates tumbled, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending July 11.
The Market Composite Index rose to 522.2, an increase of 1.7 percent on a seasonally adjusted basis from 513.4 one week earlier. On an unadjusted basis, the Index increased by 27.0 percent compared with the previous Independence Day holiday-shortened week but fell by 17.4 percent compared with the same week one year earlier. The four-week moving average rose by 0.7 percent to 493.7 from 490.2.

The seasonally adjusted Refinance Index increased by 6.9 percent to 1474.9 from 1379.3 the previous week. The four-week moving average rose by 1.8 percent to 1333.9 from 1309.8. The refinance share of mortgage activity increased to 39.2 percent of total applications from 37.3 percent the previous week.

However, the seasonally adjusted Purchase Index decreased by1.7 percent to 359.7 from 365.8 one week earlier. The Conventional Purchase Index increased by 1.4 percent while the Government Purchase Index (largely FHA) decreased by 8.2 percent. The four-week moving average edged up to 350.5 from 350.4.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 6.22 percent from 6.43 percent, with points increasing to 1.21 from 1.06 (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 5.74 percent from 5.94 percent, with points increasing to 1.13 from 1.10 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year adjustable-rate mortgages decreased to 7.16 percent from 7.24 percent, with points increasing to 0.36 from 0.26 (including the origination fee) for 80 percent LTV loans. The ARM share of activity decreased to 9.1 percent from 10.0 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.