The Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey, for the week ending May 4, 2012, calculated a 1 .7 percent (seasonally unadjusted basis) increase in the Market Composite Index in contrast to the previous week. The seasonally adjusted figure increased 2.0 percent in week-to-week comparisons.
Applications in the convention segment of the market for home loans and remortgage refinance indices made of the increase in Market Composite. The MBAs Refinance Index for conventional mortgages rose 1.8 percent. The government component of the Refinance Index dropped 2.3 percent. Overall, the Refinance Index gained 1.3 percent over the previous week.
On a seasonally adjusted basis, the Purchase Index rose 3.4% compared to the prior week. The conventional purchase Index by 5.4 percent (seasonally adjusted). MBA reports an unadjusted Purchase Index increase of 3.8 percent, which fell 0.4 percent below the figure recorded last week.
Other Mortgage Activity Metrics
The seasonally adjusted Market Composite Index four week moving average showed a gain of 1.13 percent. The seasonally adjusted Purchase Index declined 0.82 percent, but the Refinance Index gained 1.81 percent.
The volume of requests for mortgage refinancing declined to 72.1 percent of all mortgage applications submitted. The previous week, mortgage refinances comprised 72.6 percent of total applications. Refinance applications have fallen to the lowest level since the week ending April 6, 2012.
Applications for government-insured financing declined to 35.8 percent compared to 38 percent a week ago. The government share of purchase applications dropped to its lowest point since March 9, 2009. This occurrence might have a direct association with the recent increase in FHA fees in early April, which motivated many FHA homebuyers to finance their loans before the increases went into effect.
The Mortgage Bankers Association reports the average contract rate for a 30-year fixed rate mortgage, loan of $417,500 or less, dipped to 4.01 percent compared to 4.05 last week – the lowest rate ever for the MBA survey. FHA loans increased from 3.80 to 3.81 percent. Points on FHA-insured loans, which include the loan origination fee, declined from 0.50 to 0.45 for mortgages with loan-to-value ratios (LTVs) of 80 percent.
The 15-year fixed rate mortgage for loans with LTV of 80 percent dropped to a historic low for the MBA survey, from 3.29 percent to 3.31 percent. The average contract interest rates for 5 ½ adjustable rate mortgages (ARMs) decreased from 2.87 percent to 2.83 percent.
Mortgage Application Survey Indices
This week’s MBA Mortgage Applications survey provides another sliver of positive news concerning the state of the U.S. housing market. When people feel confident enough to buy homes, it indicates their optimism about the state of the economy and their personal financial future.
The MBA has conducted the survey since 1990. The Market Composite Index measures a variety of mortgage and refinances application types, including the following categories:
- Conventional – conforming, jumbo, prime and non prime
- Government – FHA, VA and RHS
The MBA survey measures mortgage applications and refinance applications for 15 indices – on a seasonal adjusted and non-adjusted basis. The survey does not account for seasonal factor in data, but includes holidays.