Econintersect: Mortgage applications decreased 7.5% for the week ending March 25, 2011 according to Mortgage Bankers Association’s Weekly Mortgage Applications Survey.
Econintersect believes mortgage applications are no longer predicitive of home sales as over 1/3 of the current home purchases are not financed – however this is the second lowest refinance share reported since May 2010.
On an unadjusted basis, the Index decreased 7.2% compared with the previous week. The Refinance Index decreased 10.1 percent from the previous week.
“Treasury and mortgage rates increased towards the end of last week, as global markets calmed following the recent crises in Japan and the Middle East. Refinance volume predictably fell in response to these rate increases. As rates climb back to 5 percent, fewer homeowners have both the incentive and the ability to refinance,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “Purchase volume remained roughly flat as we enter what is typically the peak homebuying season.”
The refinance share of mortgage activity decreased to 64.3 percent of total applications from 66.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.7 percent from 5.9 percent of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages increased to 4.92 percent from 4.80 percent, with points decreasing to 0.83 from 0.96 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also increased from last week.
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