Dennis Norman
The Mortgage Bankers Association (MBA) released its weekly mortgage applications survey for the week ending May 14, 2010. The report showed the MBA Purchase Index (a measure of the volume of loan applications related to a home purchase), after decreasing 9.5 percent the prior week, plummeted 27.1 percent for the week. The four-week moving average of home purchase mortgage applications is down 4.6 percent.
Mortgage Refinancing shot up 14.5 percent last week after increasing 14.8 percent the week before and the refinance share of mortgage applications jumped significantly to 68.1 percent this week from 51.9 percent last week. The share of adjustable rate loans remained unchanged from the prior week at 6.3 percent of all loans.
“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.”
Interest rates and fees for the week:
- 30 year fixed-rate mortgage interest rates decreased to 4.83 percent from 4.96 percent, with fees increasing to 1.08 percent from 0.91 percent on loans that are 80 percent of the value of the home.
- 15 year fixed rate mortgage interest rates decreased to 4.19 percent from 4.32 percent, with fees increasing to 1.36 percent from 0.81 percent on loans that are 80 percent of the value of the home.
- One-year ARM interest rates decreased to 6.81 percent from 6.86 percent, with fees increasing to 0.37 percent from 0.35 percent for loans that are 80 percent of the value of the home.
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