Mortgage Applications Decrease w/e 22 April 2011

April 27th, 2011
in econ_news

Econintersect: Mortgage applications decreased 5.6% WoW (but did not adjust for holiday variations) for the week ending April 22, 2011.  There was no adjustment made for Good Friday. According to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey press release:

"Purchase applications fell last week, driven primarily by a sharp decrease in government purchase applications as new, higher FHA premiums went into effect," said Michael Fratantoni, MBA’s Vice President of Research and Economics.  “This decrease reverses a 20 percent increase in government purchase applications over a four week period, which was likely driven by borrowers attempting to beat this deadline.”

Follow up:

Econintersect believes mortgage applications are no longer predicitive of home sales as over 1/3 of the current home purchases are not financed.

On an unadjusted basis, the Index decreased 5.6 percent compared with the previous week. The Refinance Index decreased 0.6 percent from the previous week.  The seasonally adjusted Purchase Index decreased 13.6 percent to its lowest level since February 25, 2011, driven by a 26.6 percent decrease in government purchase applications.  The unadjusted Purchase Index decreased 12.8 percent compared with the previous week and was 28.8 percent lower than the same week one year ago.

The refinance share of mortgage activity increased to 61.6 percent of total applications from 58.5 percent the previous week. This is the highest refinance share of the month.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.80 percent from 4.83 percent, with points decreasing to 1.01 from 1.06 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.  The effective rate also decreased from last week.

Source: MBA

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