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Mortgage Applications Increase

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RISMEDIA, January 20, 2011—The Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey for the week ending January 14, 2011. The Market Composite Index, a measure of mortgage loan application volume, increased 5.0% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 6.4% compared with the previous week.

The Refinance Index increased 7.7% from the previous week. This is the third consecutive weekly increase in refinance applications and is the highest Refinance Index observed since the beginning of December. The seasonally adjusted Purchase Index decreased 1.9% from one week earlier. The unadjusted Purchase Index increased 3.1% compared with the previous week and was 16.0% lower than the same week one year ago.

“Mortgage rates have moved somewhat lower since the beginning of the year, as mixed data on the job market continue to cloud the outlook for the economy,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “Refinance applications have picked up, as borrowers take advantage of lower rates, but purchase applications remain quite low, indicating that home sales are unlikely to pick up any time soon.”

The four-week moving average for the seasonally adjusted Market Index is up 1.4%. The four week moving average is down 0.8% for the seasonally adjusted Purchase Index, while this average is up 2.3% for the Refinance Index.

The refinance share of mortgage activity increased to 73.0% of total applications from 72.1% the previous week. This is the highest refinance share observed since the week ending December 10, 2010. The adjustable-rate mortgage (ARM) share of activity increased to 5.0% from 4.9% of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.77% from 4.78%, with points increasing to 1.20 from 0.91 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 4.16% from 4.15%, with points decreasing to 0.90 from 1.01 (including the origination fee) for 80 percent LTV loans. The effective rate also decreased from last week.

For more information, visit www.mortgagebankers.org.

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