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Wednesday, April 07, 2010

MBA: Mortgage Refinance Actvity Declines as Rates Rise

by Calculated Risk on 4/07/2010 08:52:00 AM

The MBA reports: Mortgage Refinance Applications Decrease in Latest MBA Weekly Survey

The Market Composite Index, a measure of mortgage loan application volume, decreased 11.0 percent on a seasonally adjusted basis from one week earlier. ...

The Refinance Index decreased 16.9 percent from the previous week and the seasonally adjusted Purchase Index increased 0.2 percent from one week earlier. ...

The refinance share of mortgage activity decreased to 58.7 percent of total applications from 63.2 percent the previous week, marking the lowest share observed in the survey since the week ending August 28, 2009. ...

The average contract interest rate for 30-year fixed-rate mortgages increased to 5.31 percent from 5.04 percent, with points decreasing to 0.64 from 1.07 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. This is the highest 30-year rate recorded in the survey since the first week of August 2009.
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.

Although purchase activity was flat week-to-week, the four week average is moving up due to buyers trying to beat the expiration of the tax credit. I expect any increase in activity this year to be less than the increase last year when buyers rushed to beat the expiration of the initial tax credit.