Econintersect: The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending February 11, 2011. The Market Composite Index, a measure of mortgage loan application volume, decreased 9.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 7.9 percent compared with the previous week.
Econintersect analyzed this MBA data, and found it has no correlation to home sales (analysis here).
The Refinance Index decreased 11.4 percent from the previous week and is the lowest Refinance Index recorded in the survey since the week ending July 3, 2009. The seasonally adjusted Purchase Index decreased 5.9 percent from one week earlier. The unadjusted Purchase Index decreased 0.9 percent compared with the previous week and was 18.2 percent lower than the same week one year ago.
“Mortgage rates remained above 5 percent last week, up almost a full percentage point from their October lows, and refinance volume continued to drop,” said Michael Fratantoni, MBAâ€™s Vice President of Research and Economics. “Applications for home purchases also declined on a seasonally adjusted basis. Buyers have not returned to the market as rising rates have reduced affordability, to some extent.”
The four week moving average for the seasonally adjusted Market Index is down 4.5 percent. The four week moving average is down 1.9 percent for the seasonally adjusted Purchase Index, while this average is down 6.2 percent for the Refinance Index.
The refinance share of mortgage activity decreased to 64.0 percent of total applications from 66.6 percent the previous week. This is the fourth straight week the share has declined. The adjustable-rate mortgage (ARM) share of activity increased to 6.0 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 5.12 percent from 5.13 percent, with points increasing to 0.85 from 0.84 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 4.34 percent from 4.29 percent, with points decreasing to 0.85 from 1.02 (including the origination fee) for 80 percent LTV loans. This is the highest contract 15-year rate observed in the survey since April 2010. The effective rate also increased from last week.