Wednesday, April 18, 2012

MBA: Mortgage Applications decrease, Refinance activity increases

by Bill McBride on 4/18/2012 08:28:00 AM

Form the MBA: Refinance Applications Up, Purchase Applications Down in Latest MBA Weekly Survey

The Refinance Index increased 13.5 percent from the previous week. The seasonally adjusted Purchase Index decreased 11.2 percent from one week earlier.
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The refinance share of mortgage activity increased to 75.2 percent of total applications from 70.5 percent the previous week.
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Renewed concerns about sovereign debt in Europe led to a drop in rates last week, with the 30-year rate tying our survey low, reached in early February. Refinance activity picked up in response, increasing 13.5 percent for the week. Participants in our survey indicated that about 32 percent of this refinance volume was for HARP loans," said Jay Brinkmann, MBA's Chief Economist and SVP of Research and Education. "While purchase activity declined sharply for the week, this was mostly due to a 23 percent drop in applications for FHA purchase loans. This drop follows big increases in the demand for FHA loans over several weeks in anticipation of the FHA mortgage insurance premium increases that went into effect last week. This was the largest weekly drop in the government purchase index since the expiration of the first-time homebuyer tax credit in May 2010. The demand for conventional purchase loans was down only slightly."

The average loan size of all loans for home purchase in the US was $233,381 in March 2012, up from $225,463 in February 2012.
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The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 4.05 percent from 4.10 percent,with points increasing to 0.45 from 0.43 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.