Mortgage Applications Fall – Purchase Index at 15-Year Low

The Mortgage Bankers Association (MBA) has released its Weekly Mortgage ApplicationsrnSurvey for the week ending August 19, 2011. rnWith purchase mortgage applications at the lowest level since 1996, thernMarket Composite Index, a measure of mortgage application volume, decreased 2.4 on a seasonallyrnadjusted basis from one week earlier.  Onrnan unadjusted basis it was down 2.9 percent. rnThe changes were driven by the Purchase Index which dropped 5.7 percentrnon an adjusted basis and 7.3 percent unadjusted and was 7.3 percent lower thanrnthe same week one year ago.  </p

</p

The Refinance Indexrnlost 1.7 percent although the market share of refinancing continued to climb,rnaccounting for 79.8 of all mortgage applications, an increase of 1 percentagernpoint and the highest percentage since November 2010.  The adjustable-rate mortgage (ARM)rnshare of activity increasedrnto 6.2 percent from 5.8 percent of totalrnapplications from the previous week.</p

</p

Thernfour-week moving average for the seasonally adjusted Market Index is up 6.9rnpercent since last week.  The four week movingrnaverage for the Purchase Index slipped 2.6 percent while the moving average forrnthe Refinancing Index jumped 9.9 percent. </p

 “Another week of volatile markets</band rampant uncertainty regarding the economy kept prospective homebuyers onrnthe sidelines, with purchase applications falling to a 15-year low,” saidrnMike Fratantoni, MBA’s Vice President of Research and Economics. This declinernimpacted borrowers across the board, with purchase applications for jumbo loansrnfalling by more than 15 percent, and purchase applications for the governmentrnhousing programs (FHA, VA, and USDA) falling by 8.2 percent. Although mortgagernrates remain quite low, they increased over the week, bringing refinancernapplication volumes down slightly.”</p