Mortgage applications jumped by 4.1 percent this week, up from one week earlier, reflecting rock bottom for 15-year fixed-rate loans and unsure homebuyers still eager to refinance. Meanwhile, home purchases fell, according to a weekly survey made public by the ""Mortgage Bankers Association"":http://www.mortgagebankers.org/default.htm (MBA). Good for mortgage rates, the low numbers persist in driving few homebuyers back to a jumpy and uncertain market.[IMAGE]
According to the survey, the Market Composite Index, which denotes mortgage loan application volume, went skyward by 4.1 percent on a seasonally adjusted basis from the previous week, while it jumped by 3.6 percent on a seasonally unadjusted basis for the same period ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô still staying 16.3 percent lower than the same week from the past year. Meanwhile, the Refinance Index went up by 8.0 percent, 16.3 percent below figures from the same week last year.
On a seasonally adjusted basis, the Purchase Index fell 9.1 percent from a week earlier, with nearly comparable rates for the seasonally unadjusted side of things, with declines by 10.1 percent ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô a few percentage points below rates for the same week from a year before.
According to the survey, the Market Index revealed a four-week moving average that climbed by 6.9 percent on a seasonally adjusted basis. The Purchase Index showed a 2.2-percent dip on a seasonally adjusted basis, even as the average leapt 10.1 percent for the Refinance Index.
Meanwhile, refinance activity for mortgages among total applications bounded upward by 78.8 percent, up from 75.6 percent from the week before.[COLUMN_BREAK]
These skyward numbers portrayed a share of refinance activity that hit a stride since November from a year ago. Adjustable-rate mortgages dipped to 5.8 percent from 6.1 percent of total applications from the week before.
""Unprecedented volatility in the stock market last week amid additional signs that the economy has slowed led to further drops in mortgage rates, with the 15-year rate reaching a new low for the MBA survey,"" Mike Fratantoni, MBA's VP of research and economics, said in a ""statement"":http://www.mortgagebankers.org/NewsandMedia/PressCenter/77635.htm. ""Purchase application activity fell sharply over the previous week, likely the result of potential homebuyers hesitant to purchase in this highly volatile and uncertain environment.""
Commenting further, he said that ""[r]efinance application volume increased substantially for the week, although there was substantial variation across the market. In September MBA's Weekly Applications Survey will transition to an expanded sample that covers 75% of the retail market rather than the current sample that covers roughly 50% of the retail market.
""That expanded sample showed a significantly larger increase in refinance applications than the current sample, with some lenders reporting increases in refinance applications in excess of 50 percent for the week,"" he added. ""The big differences in refinance volumes were likely driven by the decisions of some lenders not to drop rates last week, largely due to the need to manage their pipelines.""
For 30-year loans, contract interest rates fell a few percentage points on average, waxing from 4.37 percent to 4.32 percent, alongside declines in origination points for 80 percent loan-to-value ratio mortgages. Declines for the 30-year loan dropped over three straight weeks, hitting a new bottom for 2011.
At the same time, 15-year loans plunged from 3.52 percent to 3.47 percent, hitting absolute rock bottom for the first time in the history of the MBA's survey. Eighty-percent LTV mortgages saw their origination points raise from 0.96 to 1.08 as the effective rate declined from the previous week.