by Bill McBride on 1/27/2010 07:39:00 AM
Wednesday, January 27, 2010
The MBA reports: Mortgage Applications Decrease in Latest MBA Weekly Survey
The Market Composite Index, a measure of mortgage loan application volume, decreased 10.9 percent on a seasonally adjusted basis from one week earlier. ...Click on graph for larger image in new window.
“Refinance activity fell substantially last week,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “Although rates remain low, there appears to be a smaller pool of borrowers who are willing and able to refinance at today’s rates.”
The Refinance Index decreased 15.1 percent from the previous week and the seasonally adjusted Purchase Index decreased 3.3 percent from one week earlier.
The average contract interest rate for 30-year fixed-rate mortgages increased to 5.02 percent from 5.00 percent, with points decreasing to 1 from 1.05 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
This graph shows the MBA Purchase Index and four week moving average since 1990.
The four week moving average has declined sharply since October, and is at about the same level as September 1997. There are many cash buyers (mostly investors at the low end), but this decline in mortgage applications is significant. Also, it appears the refinance boom is ending.
Posted by Bill McBride on 1/27/2010 07:39:00 AM