The Mortgage Bankers Association (MBA) has released its Weekly Mortgage Applications Survey for the week ending June 11, 2010. The Market Composite Index, a measure of mortgage loan application volume, increased 17.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 29.7 percent compared with the previous week, which was a shortened week due to the Memorial Day holiday.
The Refinance Index increased 21.1 percent from the previous week. This is the highest Refinance Index recorded in the survey since May 2009. The seasonally adjusted Purchase Index increased 7.3 percent from one week earlier, which is the first increase in six weeks. The unadjusted Purchase Index increased 17.4 percent compared with the previous week and was 31.3 percent lower than the same week one year ago.
"Mortgage applications for home purchases increased last week, the first increase in over a month. Refinance applications also picked up significantly over the week," said Michael Fratantoni, MBA's vice president of research and economics. "While it is clear that purchase applications in May dropped sharply as a result of the tax credit induced increase in applications in April, it is unclear whether we are seeing the beginnings of a rebound now."
The four week moving average for the seasonally adjusted Market Index is up 3.8 percent. The four week moving average is down 1.7 percent for the seasonally adjusted Purchase Index, while this average is up 5.5 percent for the Refinance Index. The refinance share of mortgage activity increased to 74.8 percent of total applications from 72.2 percent the previous week, which is the highest refinance share observed in the survey since the week ending Dec. 18, 2009. The adjustable-rate mortgage (ARM) share of activity increased to 5.2 percent from 5.1 percent of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages increased to 4.82 percent from 4.81 percent, with points decreasing to 0.89 from 1.02 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. However, due to the decrease in points, the effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.23 percent from 4.26 percent, with points decreasing to 0.83 from 0.95 (including the origination fee) for 80 percent LTV loans. The effective rate also decreased from last week.
The average contract interest rate for one-year ARMs increased to 7.07 percent from 6.94 percent, with points decreasing to 0.27 from 0.30 (including the origination fee) for 80 percent LTV loans.
For more information, visit www.mortgagebankers.org.