“Unprecedentedrnvolatility in the stock market last week amid additional signs that the economyrnhas slowed led to further drops in mortgage rates, with the 15-year raternreaching a new low for the MBA survey,” said Mike Fratantoni, MBA’s VicernPresident of Research and Economics. “Purchase application activity fellrnsharply over the previous week, likely the result of potential homebuyersrnhesitant to purchase in this highly volatile and uncertain environment.”</p

Fratantonirncontinued, “Refinance application volume increased substantially for thernweek, although there was substantial variation across the market. In SeptemberrnMBA’s Weekly Applications Survey will transition to an expanded sample thatrncovers 75% of the retail market rather than the current sample that coversrnroughly 50% of the retail market. That expanded sample showed a significantlyrnlarger increase in refinance applications than the current sample, with somernlenders reporting increases in refinance applications in excess of 50 percentrnfor the week. The big differences in refinance volumes were likely driven byrnthe decisions of some lenders not to drop rates last week, largely due to thernneed to manage their pipelines.”</p

Mortgagernrates continued a three-week pull back from their pre-debt ceiling increases.  The average contract interest rate for arn30-year fixed rate mortgages with an 80 percent loan-to-value (LTV) ratio wasrn4.32 percent with 0.87 point including the origination fee compared to 4.37rnpercent with 1.07 points a week earlier. rnThis is a new low for 2011.  The effective rate alsorndecreased.  </p

Thernaverage contract interest rate for 15-year fixed-rate mortgages decreased to 3.47 percent from 3.52 percent, with points increasing to 1.08 from 0.96 for 80 percent LTV loans.rnThe effective rate also decreasedrnfrom last week. The 15-year contract rate is at lowest level in the history ofrnthis survey. </p

Thernadjustable-rate mortgage (ARM) share of activity decreased to 5.8 percent from 6.1 percent of totalrnapplications from the previous week.</p

The MBA’s loan application survey coversrnover 50% of all U.S. residential mortgage loan applications taken by mortgagernbankers, commercial banks, and thrifts. The data gives economists a snapshotrnview of consumer demand for mortgage loans. Base period and value forrnall indexes is March 16, 1990=100.

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