Mortgage Application Volumes in U.S. Dip 1.2%

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According to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending November 18, mortgage applications decreased 1.2 percent from one week earlier (which included the Veterans Day holiday).

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 8.6 percent compared with the previous week. The Refinance Index decreased 4.0 percent from the previous week to its lowest level since July 29, 2011. The seasonally adjusted Purchase Index increased 8.2percent from last week to its highest level since August 12, 2011. The unadjusted Purchase Index increased 15.2 percent compared with the previous week and was 4.8 percent lower than the same week one year ago.

"Purchase applications increased last week, returning to levels from before the Veteran's Day holiday," said Michael Fratantoni, MBA's Vice President of Research and Economics. "However, purchase activity remains almost 5 percent below last year's level. Overall, refinance activity dropped for the week, but there was an increase in refinance applications for government loan programs."

The four week moving average for the seasonally adjusted Market Index is down 0.42 percent. The four week moving average is up 3.08percent for the seasonally adjusted Purchase Index, while this average is down 1.39 percent for the Refinance Index.

The refinance share of mortgage activity decreased to 75.9 percent of total applications from 77.3 percent the previous week. This is the lowest refinance share since September 9, 2011. The adjustable-rate mortgage (ARM) share of activity decreased to 5.7 percent from 6.1percent of total applications from the previous week. The government share of refinance activity increased to 13.0 percent of all refinance applications from 11.8 percent the previous week. This is the highest government share of refinance applications since April 15, 2011.

In October 2011, the government share of refinance activity increased to 12.3 percent of all refinance applications. This is the highest monthly government share of refinance activity since January 2011 when MBA began tracking this metric. The West South Central and East South Central regions saw the highest levels (17.2 percent and 17.9 percent, respectively), as well as the biggest increases in government refinance activity (up 2.1 percent and up 2.0 percent respectively from September 2011). The government share of purchase activity increased 0.5 percent in October 2011 to 42.9 percent for the nation. By region the East North Central and East South Central accounted for the highest levels of this measure (at 48.8 percent and 50.9 percent, respectively), while the Mountain and Pacific region saw the largest increases in government activity for purchase applications (up 2.0 percent and up 2.1 percent, respectively from September 2011).

• The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) remained unchanged at 4.23 percent, with points decreasing to 0.46 from  0.52 (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 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 4.59 percent from 4.56 percent, with points decreasing to 0.40 from 0.46 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also increased from last week.

• The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA  increased to 4.05 percent from 4.03 percent, with points decreasing to 0.55 from 0.59 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also increased from last week.

• The average contract interest rate for 15-year fixed-rate mortgages increased to 3.58 percent from 3.54 percent, with points increasing to 0.53 from 0.47 (including the origination fee) for 80 percent LTV loans. The effective rate also increased from last week.

• The average contract interest rate for 5/1 ARMs decreased to 3.00 percent from 3.01 percent, while points remained unchanged at 0.49(including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. This is the lowest average contract interest rate for the 5/1 ARM since September 23, 2011. The effective rate also decreased from last week.

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