|Title: ||Mortgage Purchase Applications Plummet While Refinance Applications Increase in Latest MBA Weekly Survey|
WASHINGTON, D.C. (May 19, 2010) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending May 14,
2010. The Market Composite Index, a measure of mortgage loan application volume, decreased 1.5 percent on a seasonally adjusted
basis from one week earlier. On an unadjusted basis, the Index decreased 3.1 percent compared with the previous week.
The Refinance Index increased 14.5 percent from the previous week and the seasonally adjusted Purchase Index decreased 27.1
percent from one week earlier. This is the lowest Purchase Index observed in the survey since May of 1997. The unadjusted
Purchase Index decreased 27.0 percent compared with the previous week and was 24.1 percent lower than the same week one year
“Purchase applications plummeted 27 percent last week and have declined almost 20 percent over the past month, despite relatively
low interest rates. The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder
of the spring buying season. In fact, this drop occurred even as rates on 30-year fixed-rate mortgages continued to fall,
and at 4.83 percent are at their lowest level since November 2009,” said Michael Fratantoni, MBA’s Vice President of Research
and Economics. “However, refinance borrowers did react to these lower rates, with refi applications up almost 15 percent,
hitting their highest level in nine weeks.”
The four week moving average for the seasonally adjusted Market Index is up 0.8 percent. The four week moving average is
down 4.6 percent for the seasonally adjusted Purchase Index, while this average is up 4.5 percent for the Refinance Index.
The refinance share of mortgage activity increased to 68.1 percent of total applications from 57.7 percent the previous week.
The adjustable-rate mortgage (ARM) share of activity remained constant at 6.3 percent of total applications from the previous
The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.83 percent from 4.96 percent, with points increasing to 1.08 from 0.91 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
The effective rate also decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.19 percent from 4.32 percent, with points increasing to 1.36 from 0.81 (including the origination fee) for 80 percent LTV loans. This is the lowest 15-year
contract interest rate ever recorded in the survey. However, due to the increase in points, the effective rate was essentially
unchanged from last week.
The average contract interest rate for one-year ARMs decreased to 6.81 percent from 6.86 percent, with points increasing to 0.37 from 0.35 (including the origination fee) for 80 percent LTV loans.
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The survey covers over 50 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since
1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March
The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry
that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the
association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand
homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and
fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety
of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies,
mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending
field. For additional information, visit MBA's Web site: www.mba.org.