MBA Reports Increased Applications, New Categories of Data

Sep 21 2011, 8:52AM

The Mortgage Bankers Association (MBA) reported this morning that mortgage applications rose slightly during the week ended September 16.

The change was driven by increased applications for refinancing which offset a drop in purchase mortgage applications.

The seasonally adjusted Market Composite Index, a measure of application volume, increased 0.6 percent from the week ended September 9.  On an unadjusted basis the Index rose 25.2 percent, over the previous week which was shortened by the Labor Day holiday.  The four-week moving average for the seasonally adjusted Market Index was down 3.15 percent.

The Refinance Index increased 2.2 percent but its four-week moving average lost 3.91 percent.  The Purchase Index dropped 4.7 percent on a seasonally adjusted basis and 17.1 percent unadjusted compared to the previous four-day holiday week.  The seasonally adjusted moving average was down 0.54 percent.

Refinancing constituted 78.3 percent of total mortgage applications during the week, up from 76.8 percent and adjustable-rate mortgages (ARMs) had a share of 6.7 percent compared to 7.3 percent a week earlier. 
  
MBA reported that during the month of August, the investor share of purchase mortgage applications was at 5.7 percent, a slight increase from 5.5 percent in July. This change was led by an increase in the Pacific region. In addition, the share of purchase mortgages for second homes increased to 6.0 percent in August from 5.9 percent in July.

The average interest rate for 30-year fixed-rate mortgages (FRM) was unchanged from the previous week at 4.29 percent while points, including the origination fee, increased from 0.38 point to 0.41 point.  The effective rate for these loans increased.  The average contract rate for 15-year FRM decreased from 3.52 percent to 3.46 percent with points increasing to 0.45 from 0.38; the effective rate also decreased.  Interest rates quoted for both the 15-year and 30-year FRM are for loans with conforming loan balances of $417,500 or less.

The average contract interest rate for 30-year fixed-rate mortgages designated as jumbo loans, i.e. with balances over $417,500, decreased to 4.55 percent from 4.57 percent, with points increasing to 0.46 from 0.42. The effective rate increased from the previous week.

The average rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.07 percent from 4.08 percent, with points increasing to 0.51 from 0.48.  The effective rate increased from last week.

The rate for 5/1 ARMs decreased to 2.96 percent from 2.99 percent, with points increasing to 0.49 from 0.46; the effective rate increased from the previous week. All interest rate information is for 80 percent loan-to-value (LTV) ratio loans.

MBA also announced that their weekly report will reflect an enhanced survey sample which now covers more than 75 percent of all retail and consumer direct channel mortgage applications compared to 50 percent in earlier surveys.  This change in sample size has been analyzed in parallel with data from the old sample since January to ensure comparability.  As is apparent from the report this week, the new survey also gathers data on FHA, Jumbo, and 5/1 Hybrid ARM loans.