by Calculated Risk on 9/21/2011 07:24:00 AM

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

The Refinance Index increased 2.2 percent from the previous week. The seasonally adjusted Purchase Index decreased 4.7 percent from one week earlier.
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The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) remained unchanged at 4.29 percent, with points increasing to 0.41 from 0.38 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (> $417,500) decreased to 4.55 percent from 4.57 percent, with points increasing to 0.46 from 0.42 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

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

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 from the MBA:

This week's results are based on an enhanced sample which captures more than 75% of all retail and consumer direct channel mortgage applications, compared to 50% previously. This expansion in survey coverage will benefit all users of the survey as it will increase the representativeness of the data.

Changes to the Weekly Application Survey include:

• The survey captures more than 75% of all U.S. retail and consumer direct mortgage applications, compared to 50% previously.
• MBA has tracked the old sample together with the new sample since January 14, 2011 to ensure that the new information is comparable with historical data.
• Due to the high correlation between the old sample and the new sample, no restatement of the historical data appears necessary.
• The release now includes additional information regarding mortgage rates, including reporting on 5/1 ARM rates and 30-year fixed rates for jumbo loans.

Note: Existing home sales will probably increase to around 4.92 million SAAR in August (Lawler's estimate) - above the consensus forecast of 4.75 million SAAR - but this index suggests another decline in September and October.