Mortgage Applications Rise as Rates Fall

LowerrnTreasury rates sparked an increase in mortgage applications during the weekrnended November 4 according to the Mortgage Bankers Association’s (MBA) WeeklyrnMortgage Applications Survey.  Anrnincrease in volume was noted for both purchase mortgages and refinancing.</p

ThernMarket Composite Index which measures overall applications volume increasedrn10.3 percent on a seasonally adjusted basis from the week ended October 28 andrn9.9 percent unadjusted.  The RefinancernIndex was up 12.1 percent and the seasonally adjusted Purchase Index increasedrn4.8 percent to the highest level since August. rnThe unadjusted Purchase Index increased 2.7 percent over the previousrnweek and was 2.5 percent lower than during the same week in 2010.</p

“Treasuryrnrates dropped last week, as renewed turmoil in Europe once again led to a flight tornquality, and 30-year mortgage rates dropped to their second lowest level of thernyear,” said Mike Fratantoni, MBA’s Vice President of Research andrnEconomics. “Refinance applications jumped more than 12 percent to theirrnhighest level in a month and some lenders experienced even larger increases. Asrnhas been the case all year, many refinance applicants are opting to deleveragernby choosing 15-year mortgages.”</p

The four weekrnmoving averages for the seasonally adjusted Composite Index and the RefinancernIndex were down 0.37 percent and 0.72 percent and up 0.89 percent for thernseasonally adjusted Purchase Index.  </p

The refinancingrnshare of mortgage activity rose to 78.6 percent from 77.1 percent, the first increasernin three weeks.  Adjustable RaternMortgages (ARMs) accounted for 5.8 percent of applications, unchanged from thernprevious week.</p

Purchase Index vs 30 Yr Fixed</b</p