Wednesday, September 14, 2011

MBA: Mortgage Purchase Application Index increases, Record Low Mortgage Rates

by Bill McBride on 9/14/2011 07:29:00 AM

The MBA reports: Mortgage Applications Increase in Latest MBA Weekly Survey

The seasonally adjusted Purchase Index increased 7.0 percent from one week earlier. ... The Refinance Index increased 6.0 percent from the previous week, stopping a run of three consecutive weekly decreases.
...
The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.17 percent from 4.23 percent, with points decreasing to 0.97 from 1.04 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also decreased from last week. The 30-year fixed contract rate is the lowest in the history of the survey, with the previous low being 4.21 percent in the week ending October 8, 2010.
The following graph shows the MBA Purchase Index and four week moving average since 1990.

MBA Purchase Index Click on graph for larger image in graph gallery.

August was an especially weak month for this index. This increase was pretty small, and although this doesn't include the large number of cash buyers, this suggests fairly weak home sales in September and October.

Note: Existing home sales will probably increase in August compared to July (sales are counted at closing), but this suggests another decline in September and October.

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