Hurricane Sandy Brings Mortgage Applications Down Further

Mortgage applications continued to decline in the wake of Hurricane Sandy, according to the ""Mortgage Bankers Association's"":http://www.mortgagebankers.org/default.htm (MBA) most recent Weekly Mortgage Applications Survey.

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The trade association's Market Composite Index decreased 5.0 percent on a seasonally adjusted basis for the week ending November 2. The decline was no different on an unadjusted basis.

Refinance activity also decreased from the previous week, falling 5 percent. The Refinance Index has declined for five straight weeks and is resting at its lowest level since the end of August, MBA reported. Meanwhile, the refinance share of mortgage activity stayed flat at 80 percent.

While refinances fell, HARP activity did see an increase. The HARP share of refinance applications rose to 27 percent from 25 percent the previous week.

Purchase applications experienced the same decline as the other categories, falling on a seasonally adjusted basis by 5 percent.

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The unadjusted Purchase Index was down 7 percent compared to the prior week.

Geographic data suggest the weekly decrease came about mostly as the result of Hurricane Sandy.

""Last week's storm had a significant impact on application volumes on the East Coast,"" said Mike Fratantoni, MBA's VP of research and economics. ""Applications fell more than 60 percent compared to the prior week in New Jersey, almost 50 percent in New York and nearly 40 percent in Connecticut. Other East Coast states also saw declines over the week, while many states in other parts of the country had increases in application volumes.""

MBA's release follows an ""earlier report"":https://themreport.com/articles/mortgage-activity-declines-in-all-categories-to-start-november-2012-11-06 from _Mortgage Daily_ showing an 11 percent drop in mortgage applications for the same week.

While Sandy's impact may have led to bigger losses for the week, ""Capital Economics'"":http://www.capitaleconomics.com/ Ed Stansfield believes the sustained decline in mortgage applications throughout October suggests a larger trend at work.

In a response to the data, Stansfield--chief property economist for the firm--wrote that the steady drop in activity ""suggests that tight lending criteria are continuing to act as a brake on the level of active demand in the U.S. housing market.""

""On balance, today's MBA data on mortgage applications and mortgage interest rates were disappointing. Although it is clearly early days, they suggest that QE3 has so far given little, if any, additional impetus to the housing recovery,"" Stansfield said. ""Indeed, the bottom line from today's figures is that mortgage-dependent buyers are still only bit-part players in the U.S. housing market recovery.""