April 20th, 2011
Econintersect: Mortgage applications increased 5.3% week-over-week according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending April 15, 2011.
Econintersect believes mortgage applications are no longer predicitive of home sales as over 1/3 of the current home purchases are not financed.
“Purchase application volume jumped last week largely due to another sharp increase in applications for government loans. Borrowers were likely motivated to apply for loans before the scheduled increase in FHA insurance premiums,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “Refinance activity increased somewhat, as rates dropped to their lowest level in a month towards the end of the week.”
The refinance share of mortgage activity decreased to 58.5% of total applications from 60.3 percent the previous week. This is the lowest refinance share since May 7, 2010. The adjustable-rate mortgage (ARM) share of activity increased to 6.5 percent from 5.9 percent of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.83 percent from 4.98 percent, with points increasing to 1.07 from 0.93 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also decreased from last week.