Wednesday, January 19, 2011

MBA: Mortgage Purchase Application decline in latest survey

by Bill McBride on 1/19/2011 07:27:00 AM

The MBA reports: Applications Increase in Latest MBA Weekly Survey

The Refinance Index increased 7.7 percent from the previous week. This is the third consecutive weekly increase in refinance applications and is the highest Refinance Index observed since the beginning of December. The seasonally adjusted Purchase Index decreased 1.9 percent from one week earlier.
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"Mortgage rates have moved somewhat lower since the beginning of the year, as mixed data on the job market continue to cloud the outlook for the economy," said Michael Fratantoni, MBA's Vice President of Research and Economics. "Refinance applications have picked up, as borrowers take advantage of lower rates, but purchase applications remain quite low, indicating that home sales are unlikely to pick up any time soon."
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The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.77 percent from 4.78 percent, with points increasing to 1.20 from 0.91 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
MBA Purchase Index Click on graph for larger image in new window.

This graph shows the MBA Purchase Index and four week moving average since 1990.

The four-week moving average of the purchase index suggests weak existing home sales through the first couple months of 2011. As the MBA's Fratantoni noted: "[P]urchase applications remain quite low, indicating that home sales are unlikely to pick up any time soon."

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