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Home Purchases Up and Refis Dip Over Last Week

NationalMortgageProfessional.com
Jul 06, 2011

Mortgage apps dropped 5.2 percent from last week, according to data from the Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending July 1, 2011. The Market Composite Index, a measure of mortgage loan application volume, decreased 5.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5.1 percent compared with the previous week. The Refinance Index decreased 9.2 percent from the previous week. The Refinance Index has decreased for three consecutive weeks, reaching its lowest level since May 6, 2011. The seasonally adjusted Purchase Index increased 4.8 percent from one week earlier. The unadjusted Purchase Index increased 4.4 percent compared with the previous week and was 11.7 percent higher than the same week one year ago. "Stronger economic data towards the end of the week coupled with the end of the Fed's second round of quantitative easing helped bring mortgage rates to their highest level in over a month," said Michael Fratantoni, VP of research and economics for the Mortgage Bankers Association (MBA). "Refinance activity, already constrained by a smaller pool of eligible borrowers, declined in response to the higher rates, but purchase applications picked up appreciably in the week before the July 4th holiday." The four week moving average for the seasonally adjusted Market Index is down 0.5 percent. The four week moving average is up 0.8 percent for the seasonally adjusted Purchase Index, while this average is down 1.1 percent for the Refinance Index. The refinance share of mortgage activity decreased to 66.4 percent of total applications from 69.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.1 percent from 5.8 percent of total applications from the previous week. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.69 percent from 4.46 percent, with points decreasing to 0.90 from 1.19 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. This is the highest 30-year rate recorded in the survey since the middle of May 2011. The effective rate also increased from last week. The average contract interest rate for 15-year fixed-rate mortgages increased to 3.79 percent from 3.64 percent, with points decreasing to 0.88 from 1.11 (including the origination fee) for 80 percent LTV loans. This is the highest 15-year rate recorded in the survey since the beginning of May 2011. The effective rate also increased from last week.
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