Dennis Norman
Mortgage Applications Continue to Indicate Home Sales Are Slowing
The Mortgage Bankers Association (MBA) released its weekly mortgage applications survey for the week ending May 28, 2010. The report showed the MBA Purchase Index (a measure of the volume of loan applications related to a home purchase), after decreasing in each of the three prior weeks, decreased another 4.1 percent for the week ending May 28th. This marks the lowest level the MBA purchase index has reached since April 1997.
The four-week moving average of home purchase mortgage applications is down 12.1 percent.
Refinance activity still strong…
The Mortgage Refinancing index increased another 2.4 percent after increasing 17.0 percent the prior week. The refinance share of mortgage applications increased to 73.5 percent this week from 72.2 percent last week, which is the highest refinance share of the market since December 2009. As I said last week, I think the refi-activity is clearly an indication that a lot of existing homeowners plan on staying put for a while.
“With another week of historically low mortgage rates, the trend from the prior three weeks continued, as refinance applications increased while purchase applications dropped. Purchase applications are now almost 40 percent below their level four weeks ago, while the refinance share, at 74 percent, is at its highest level since December,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “In addition, the ARM share dropped last week to its lowest level since March of this year, as borrowers took the opportunity to lock in at historically low fixed mortgage rates.”
Interest rates and fees for the week:
- 30 year fixed-rate mortgage interest rates increased slightly to 4.83 percent from 4.80 percent, with fees decreasing to 1.05 percent from 1.08 percent on loans that are 80 percent of the value of the home.
- 15 year fixed rate mortgage interest rates decreased ever so slightly to 4.24 percent from 4.25 percent, with fees increasing to 1.11 percent from 1.0 percent on loans that are 80 percent of the value of the home.
- One-year ARM interest rates increased to 6.96 percent from 6.83 percent, with fees decreasing to 0.27 percent from 0.38 percent for loans that are 80 percent of the value of the home.
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