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MBA Reports Purchase Apps Hit Highest Mark in 2011
Apr 06, 2011

Mortgage applications dropped two percent from one week earlier, according to data from the Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending April 1, 2011. The Market Composite Index, a measure of mortgage loan application volume, decreased two percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1.5 percent compared with the previous week. The Refinance Index decreased 6.2 percent to its lowest level since Feb. 25, 2011, on a seasonally adjusted basis. The seasonally adjusted Purchase Index increased 6.7 percent to its highest level of the year. The Government Purchase Index increased 10.3 percent to its highest level since May 7, 2010, on a seasonally adjusted basis. The unadjusted Purchase Index increased 7.0 percent compared with the previous week and was 16.8 percent lower than the same week one year ago. "Purchase application volume increased last week reaching the highest level of the year, but remains relatively low by historical standards, at levels last seen in 1997," said Michael Fratantoni, vice president of research and economics for the Mortgage Bankers Association. "Borrowers were likely motivated to apply before a scheduled increase in FHA insurance premiums." The four week moving average for the seasonally adjusted Market Index is down 1.9 percent. The four week moving average is up 0.9 percent for the seasonally adjusted Purchase Index, while this average is down 3.2 percent for the Refinance Index. "Rates were flat last week, but refinance activity fell, as the pool of borrowers who have both the incentive and the ability to qualify for a refinance continues to shrink," said Fratantoni. The refinance share of mortgage activity decreased to 61.2 percent of total applications from 64.3 percent the previous week. This is the lowest refinance share since May 7, 2010. The adjustable-rate mortgage (ARM) share of activity increased to 6.1 percent from 5.7 percent of total applications from the previous week. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.93 percent from 4.92 percent, with points decreasing to 0.70 from 0.83 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate decreased from last week. The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.14 percent from 4.16 percent, with points increasing to 1.09 from 0.99 (including the origination fee) for 80 percent LTV loans. The effective rate also increased from last week.
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