The Mortgage Bankers Association (MBA) has released its Weekly Mortgage Applications Survey for the week ending Dec. 10, 2010. The Market Composite Index, a measure of mortgage loan application volume, decreased 2.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2.7 percent compared with the previous week.
The Refinance Index decreased 0.7 percent from the previous week. This is the fifth straight weekly decline for the Refinance Index. The seasonally adjusted Purchase Index decreased five percent from one week earlier. The unadjusted Purchase Index decreased 8.6 percent compared with the previous week and was 16.6 percent lower than the same week one year ago.
"Treasury rates increased last week following news that lower tax rates could be extended for another two years, boosting growth prospects. With this move, mortgage rates reached their highest level in more than six months," said Michael Fratantoni, MBA's vice president of research and economics. "Not surprisingly, with rates up more than half a percentage point over the past month, refinance activity has declined sharply. Home purchase applications dropped this week following three weeks of increases, but remain near levels last seen in early May."
The four week moving average for the seasonally adjusted Market Index is down 4.7 percent. The four week moving average is up 2.6 percent for the seasonally adjusted Purchase Index, while this average is down 6.8 percent for the Refinance Index.
The refinance share of mortgage activity increased to 76.7 percent of total applications from 75.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.5 percent from 5.6 percent of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages increased to 4.84 percent from 4.66 percent, with points increasing to 1.34 from 0.94 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. This is the highest 30-year fixed-rate observed in the survey since the beginning of May 2010. The effective rate also increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 4.21 percent from 3.98 percent, with points increasing to 1.28 from 0.97 (including the origination fee) for 80 percent LTV loans. This is the highest 15-year fixed-rate observed in the survey since the beginning of June 2010. The effective rate also increased from last week.
For more information, visit www.mortgagebankers.org.