Econintersect: Mortgage applications increased 8.2% WoW for the week ending May 6, 2011. The Mortgage Bankers Association’s Weekly Mortgage Applications Survey showed that on an unadjusted basis, the Index increased 8.3 percent compared with the previous week. Michael Fratantoni, MBA’s Vice President of Research stated:
Rates dropped again last week as the Federal Reserve continued its QE2 asset purchase program. The 30-year fixed mortgage rate is now 46 basis points below its 2011 peak, and has decreased for four straight weeks by a total of 31 basis points. Over this four week span, the refinance index has increased by about 18 percent. Despite the recent increases however, refinance application volumes remain more than 50 percent below levels seen last fall.
The Refinance Index increased 9.0 percent from the previous week, and is at its highest level since the week ending March 18, 2011. The seasonally adjusted Purchase Index increased 6.7 percent from one week earlier.
The refinance share of mortgage activity increased to 63.1 percent of total applications from 62.7 percent the previous week. The refinance share is at its highest level since the week ending March 25, 2011. The adjustable-rate mortgage (ARM) share of activity decreased to 6.5 percent from 6.7 percent of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.67 percent from 4.76 percent, with points increasing to 1.10 from 0.75 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The 30-year rate is at its lowest since December 2010. The effective rate also decreased from last week.