Mortgage Applications Decrease, While Interest Rates Climb

Posted by Orb Staff on December 22, 2010 No Comments
Categories : Residential Mortgage

The Mortgage Bankers Association (MBA) has released its weekly mortgage applications survey for the week ending Dec. 17. The MBA's Market Composite Index decreased 18.6% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index decreased 20% compared with the previous week.

The Refinance Index decreased 24.6% from the previous week, representing its sixth consecutive week of decline and its lowest level since the week ending April 30. The seasonally adjusted Purchase Index decreased 2.5% from one week earlier; the unadjusted Purchase Index decreased 4.9% from a week earlier and was 8.4% lower than the same week one year ago.

‘Refinance application volume dropped sharply this week as mortgage rates held near six-month highs,’ says Michael Fratantoni, the MBA's vice president of research and economics. ‘Purchase applications fell for a second week, with the level of applications little changed over the past month, indicating that home sales are likely to remain relatively weak over the next few months.’

The refinance share of mortgage activity decreased to 72.3% of total applications from 76.7% the previous week, representing the lowest refinance share observed in the survey since early June. The adjustable-rate mortgage share of activity increased to 6.1% from 5.5% of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages increased to 4.85% from 4.84%, and the average contract interest rate for 15-year fixed-rate mortgages increased to 4.22% from 4.21%.

SOURCE: Mortgage Bankers Association

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