RealNews

New applications for mortgages for home purchases rose 2.7% during the week ending April 6, 2007, according to the Weekly Mortgage Applications Survey from the Mortgage Bankers Association. Refinance applications fell 4%. Both Fixed Rate Mortgage (FRM) and Adjustable Rate Mortgage (ARM) rates increased and average points* paid also increased for all terms of loans - an unambiguous, across the board increase in real interest rates that reflects the underlying strength of the demand for home loans.

Average Rates:

30-year FRM: 6.16%, 1.39 points*
15-year FRM: 5.91%, 1.15 points
1-year ARM: 5.88%, 0.75 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%.

housing market,mortgages,mortgage market,mortgage rates,subprime

Purchase Applications Rise, Refinance Applications Decline in Latest MBA Survey

WASHINGTON, D.C. (April 11, 2007) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending April 6, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 646.6, a decrease of 0.4 percent on a seasonally adjusted basis from 649.5 one week earlier. On an unadjusted basis, the Index decreased 0.1 percent compared with the previous week and was up 10.8 percent compared with the same week one year earlier.

The Refinance Index decreased 4 percent to 2015 from 2098.3 the previous week and the seasonally adjusted Purchase Index increased 2.7 percent to 413.8 from 402.9 one week earlier. The seasonally adjusted Conventional Index decreased 0.3 percent to 953.5 from 956.4 the previous week, and the seasonally adjusted Government Index decreased 2.1 percent to 134.8 from 137.7 the previous week.

The four week moving average for the seasonally adjusted Market Index is down 1.6 percent to 659.8 from 670.8. The four week moving average decreased slightly to 409.6 from 409.7 for the Purchase Index, while this average is down 3.4 percent to 2129.9 from 2204.2 for the Refinance Index.

The refinance share of mortgage activity decreased to 42.8 percent of total applications from 44.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 18.7 from 19.2 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages increased to 6.16 percent from 6.13 percent, with points increasing to 1.39 from 1.25 (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 5.91 from 5.85 percent, with points increasing to 1.15 from 1.09 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year ARMs increased to 5.88 from 5.87 percent, with points increasing to 0.75 from 0.72 (including the origination fee) for 80 percent LTV loans.