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Mortgage Applications Tick Up 0.6% on Low Rates

Mortgage application volume crept up from last week, with refinancing activity leaping ahead of purchases, according to a weekly survey by the ""Mortgage Bankers Association"":http://mbaa.org/default.htm (MBA). Stacks of applications around the nation thickened by less than 1 percent from the previous week, largely as a result of climbing mortgage rates.

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The ""_Weekly Mortgage Applications Survey_"":http://www.mortgagebankers.org/NewsandMedia/PressCenter/77954.htm, a measure of total application volume by the trade group, pulled together several indices that reflect volume, refinancing activity, and purchases from around the country.

The Market Composite Index found applications inching up by 0.6 percent on a seasonally adjusted basis, while on an unadjusted basis the same applications rose by 25.2 percent.

The MBA observed a 2.2-percent uptick along the lines of the Refinance Index, even while the Purchase Index fell by 4.7 percent from last week. On an unadjusted basis, the Purchase Index noted a 17.1-percent increase in contrast with numbers from the week before.

""Record low mortgage rates continue to drive refinancing applications,"" ""Greg McBride"":http://www.bankrate.com/blogs/federal-reserve/about-greg-mcbride-cfa.aspx, a senior financial analyst with finance Web site ""Bankrate.com"":http://www.bankrate.com/, tells _MReport_. ""But the uptick in existing home sales is more a reflection of conditions back in June when the contracts were signed, than in August when the closings occurred.""

Mortgage rates remain at record lows, with real estate Web site ""Zillow"":http://www.zillow.com/ ""revealing"":https://themreport.com/articles/zillow-sees-30-year-loan-rates-hit-394-2011-09-20 only a modest increase in rates for the benchmark 30-year loan Tuesday.

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The four-week moving average for the Market Index fell by a few percentage points to hit a seasonally adjusted 3.15 percent, according to the MBA.

The trade group also noted a 0.54-percent decline for the Purchase Index on a seasonally adjusted basis. Meanwhile, the Refinance Index signaled a 3.91-percent drop.

The share of refinancing activity in mortgage markets swelled to 78.3 percent, up from 76.8 percent as recorded last week. Adjustable-rate mortgages (ARMs) plunged from 7.3 percent to 6.7 percent in total application volume.

The MBA found investors filing 5.7 percent more in home purchase applications over August, reflecting a bump up from 5.5 percent seen over July.

The numbers for average contract interest rates largely hovered at the same level seen last week. For 30-year fixed-rate loans, the interest rate stayed the same at 4.29 percent, with an uptick in the effective rate.

Those 30-year loans backed by the Federal Housing Administration saw a dip in their average contract interest rates, with declines in rates to 4.07 percent from 4.08 percent, as the effective rate jumped up from last week. Among jumbo loan balances, contract interest rates for 30-year loans fell a few percentage points, hitting 4.55 percent from 4.57 percent seen last week.

The MBA also found contact interest rates for 15-year fixed-rate loans falling on average from 3.52 percent to 3.46 percent, alongside declines in the effective rate from last week.

For 5-year and 1-year ARMS, the trade group noted a decline in rates, with 2.99 percent seen from the week before now cresting at 2.96 percent.

In a statement, the MBA revealed that the weekly survey now bears on more than 75 percent of retail and consumer-direct mortgage applications, up from a share of 50 percent from the previous week.

""This expansion in survey coverage will benefit all users of the survey as it will increase the representativeness of the data,"" the trade group said of the changes.

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.
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