Mortgage Applications Back Up in MBA Weekly Survey

MBA (5/7/2008 ) Kemp, Carolyn
Following two weeks of declines, mortgage applications recorded a healthy uptick last week as key interest rates fell back under 6 percent, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending May 2.
The Market Composite Index rose to 655.4, an increase of 15.6 percent on a seasonally adjusted basis from 567.0 one week earlier. On an unadjusted basis, the Index increased 15.9 percent compared with the previous week but was down 4.4 percent compared with the same week one year earlier. Despite the gain, the four-week moving average for the Market Index fell by 2.6 percent to 650.8 from 668.4.

The seasonally adjusted Refinance Index increased by 19.3 percent to 2273.8 from 1905.2 the previous week. The four-week moving average fell by 4.6 percent to 2332.8 from 2445.6. The refinance share of mortgage activity increased to 47.1 percent of total applications from 45.7 percent the previous week.

The seasonally adjusted Purchase Index increased by 12.1 percent to 381.3 from 340.1 one week earlier. The Conventional Purchase Index increased 11.7 percent while the Government Purchase Index (largely FHA) increased 13.2 percent. The four-week moving average declined by 0.2 percent to 365.1 from 365.9.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.91 percent from 6.01 percent, with points decreasing to 1.12 from 1.26 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.49 percent from 5.53 percent, with points decreasing to 1.07 from 1.24 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year adjustable-rate mortgages decreased to 6.77 percent from 6.86 percent, with points decreasing to 1.35 from 1.40 (including the origination fee) for 80 percent LTV loans. The ARM share of activity increased to 6.8 percent from 5.9 percent of total applications from the previous week.

The survey covers 50 percent of all U.S. retail residential mortgage originations and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.