Dennis Norman
By: Dennis Norman
The Mortgage Bankers Association (MBA) released its weekly mortgage applications survey for the week ending August 21, 2009. The Market Composite Index, a measure of mortgage loan application volume, increased 7.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 6.3 percent compared with the previous week and 34.1 percent compared with the same week one year earlier.
The Refinance Index increased 12.7 percent from the previous week, the third increase in the last four weeks. The seasonally adjusted Purchase Index increased 1.0 percent from one week earlier, solely boosted by increased demand for government loans. This marks the fourth consecutive weekly gain – the first time this has happened since March, when fixed mortgage rates first dropped and stayed below 5 percent.
The refinance share of mortgage activity increased to 56.5 percent of total applications from 53.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged from the previous week at 6.5 percent of total applications (I would have expected this would be a smaller percentage than this even).
The average interest rate for 30 year fixed rate mortgages increased to 5.24 percent from 5.15 percent with loan fees increasing to 1.07 percent from 0.98 percent for 80 percent LTV loans. The average interest rate for a 15-year fixed-rate mortgage increased to 4.58 percent from 4.52 percent with loan fees increasing to 1.18 percent from 0.93 percent for 80 percent LTV loans. The average interest rate for one-year ARMS increased to 6.74 percent from 6.66 percent, with loan fees increasing to 0.17 percent from 0.07 percent for 80 percent LTV loans.
The MBA survey covers over 50 percent of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. The information is gathered from mortgage bankers and commercial banks and thrifts.
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