As Wall Street continues to struggle with bad news from the mortgage market, purchase applications continue to climb. New applications for home purchases rose 2.2% during the week ending March 9, 2007, while refinance applications increased 3.5%, according to the Weekly Mortgage Applications Survey from the Mortgage Bankers Association.
The problems in the mortgage market causing so much trouble in the stock market are that subprime (poor credit, low down) lenders are seeing record foreclosure rates and all types of lenders are responding with increased scrutiny of credit record, employment and other qualifications for borrowers. Whether lenders will actually make the loans, buyers are applying for them and homeowners continue to apply for refinance mortgages.
Interest rates decreased for the average 30-year Fixed Rate Mortgage (FRM) and increased for the average 15-year FRM and 1-year Adjustable Rate Mortgage (ARM). Points* moved up for the 30-year FRM and down for the 15-year FRM and 1-year ARM.
Average Rates:
30-year FRM: 6.03%, 1.38 points*
15-year FRM: 5.78%, 1.22 points
1-year ARM: 5.86%, 0.76 points
* Points reported by Mortgage Bankers Association in this survey include origination fees as well as traditional discount points. Average rates are based on an 80% LTV loan. This means a loan amount no more than 80% of the property value as determined by the lower of the purchase price or appraised value. Typically this means a 20% down payment, though an 80% loan can also be achieved with a second mortgage carried by the seller or a third party lender for the difference between the actual down payment and 20%.
Applications Increase in Latest MBA Survey
WASHINGTON, D.C. (March 14, 2007) - The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending March 9, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 690.5, an increase of 2.8 percent on a seasonally adjusted basis from 671.6 one week earlier. On an unadjusted basis, the Index increased 3.2 percent compared with the previous week and was up 19.1 percent compared with the same week one year earlier.
The Refinance Index increased 3.5 percent to 2312.2 from 2234.2 the previous week and the seasonally adjusted Purchase Index increased 2.2 percent to 414.3 from 405.3 one week earlier. The seasonally adjusted Conventional Index increased 2.6 percent to 1026.3 from 1000.4 the previous week, and the seasonally adjusted Government Index increased 5.6 percent to 130.4 from 123.5 the previous week.
The four week moving average for the seasonally adjusted Market Index is up 2 percent to 648.7 from 636. The four week moving average is up 0.9 percent to 400.6 from 397.2 for the Purchase Index, while this average is up 3.4 percent to 2102.8 from 2032.6 for the Refinance Index.
The refinance share of mortgage activity increased to 46.2 percent of total applications from 46.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 21.9 from 21.4 percent of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 6.03 percent from 6.04 percent, with points increasing to 1.38 from 1.27 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages increased to 5.78 from 5.73 percent, with points decreasing to 1.22 from 1.24 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for one-year ARMs increased to 5.86 from 5.79 percent, with points decreasing to 0.76 from 0.8 (including the origination fee) for 80 percent LTV loans.
**SPECIAL NOTES**
The survey covers approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.
Post a Comment