Wednesday, March 06, 2013

MBA: Mortgage Applications Increase Sharply in Latest Weekly Survey

by Bill McBride on 3/06/2013 07:00:00 AM

From the MBA: Mortgage Applications Increase as Rates Drop in Latest MBA Weekly Survey

The Refinance Index increased 15 percent from the previous week and was at its highest level since mid-January. The seasonally adjusted Purchase Index also increased 15 percent from one week earlier and was at its highest level since the week ending February 1.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 3.70 percent from 3.77 percent, with points decreasing to 0.39 from 0.48 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added
Refinance Index Click on graph for larger image.

The first graph shows the refinance index.

There has been a sustained refinance boom for over a year, and 77 percent of all mortgage applications are for refinancing.

Refinance activity will probably slow in 2013.

Purchase IndexThe second graph shows the MBA mortgage purchase index.  The 4-week average of the purchase index has generally been trending up (slowly) over the last six months.

This index will probably continue to increase as conventional home purchase activity increases.