Mortgage applications increased 8.2 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending May 6, 2011. The Market Composite Index, a measure of mortgage loan application volume, increased 8.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 8.3 percent compared with the previous week. The Refinance Index increased nine percent from the previous week, and is at its highest level since the week ending March 18, 2011. The seasonally adjusted Purchase Index increased 6.7 percent from one week earlier. The unadjusted Purchase Index increased 7.1 percent compared with the previous week and was 25.8 percent lower than the same week one year ago.
"Rates dropped again last week as the Federal Reserve continued its QE2 asset purchase program. The 30-year fixed mortgage rate is now 46 basis points below its 2011 peak, and has decreased for four straight weeks by a total of 31 basis points," said Michael Fratantoni, MBA's VP of research. "Over this four week span, the refinance index has increased by about 18 percent. Despite the recent increases however, refinance application volumes remain more than 50 percent below levels seen last fall."
The four week moving average for the seasonally adjusted Market Index is up 2.9 percent. The four week moving average is up 0.4 percent for the seasonally adjusted Purchase Index, while this average is up 4.3 percent for the Refinance Index.
The refinance share of mortgage activity increased to 63.1 percent of total applications from 62.7 percent the previous week. The refinance share is at its highest level since the week ending March 25, 2011. The adjustable-rate mortgage (ARM) share of activity decreased to 6.5 percent from 6.7 percent of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.67 percent from 4.76 percent, with points increasing to 1.10 from 0.75 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The 30-year rate is at its lowest since December 2010. The effective rate also decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.81 percent from 3.96 percent, with points increasing to 1.05 from 0.82 (including the origination fee) for 80 percent LTV loans. The 15-year rate is at its lowest since November 2010. The effective rate also decreased from last week.