Mortgage Applications Continue to Increase for a 3-Week Rally

RISMEDIA - The Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey for the week ending July 11, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 522.2, an increase of 1.7% on a seasonally adjusted basis from 513.4 one week earlier. On an unadjusted basis, the Index increased 27.0% compared with the previous Independence Day holiday shortened week and was down 17.4% compared with the same week one year earlier. This marks the third week in a row that the MBA announced mortgage applications increasing, following last week’s 7.5% increase.

The Refinance Index increased 6.9% to 1474.9 from 1379.3 the previous week and the seasonally adjusted Purchase Index decreased 1.7% to 359.7 from 365.8 one week earlier. The Conventional Purchase Index increased 1.4% while the Government Purchase Index (largely FHA) decreased 8.2%.

The four week moving average for the seasonally adjusted Market Index is up 0.7% to 493.7 from 490.2. The four week moving average for the Purchase Index edged up to 350.5 from 350.4, while this average is up 1.8% to 1333.9 from 1309.8 for the Refinance Index.

The refinance share of mortgage activity increased to 39.2% of total applications from 37.3% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 9.1 from 10.0% of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 6.22% from 6.43%, with points increasing to 1.21 from 1.06 (including the origination fee) for 80% loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.74% from 5.94%, with points increasing to 1.13 from 1.10 (including the origination fee) for 80% LTV loans.

The average contract interest rate for one-year ARMs decreased to 7.16% from 7.24%, with points increasing to 0.36 from 0.26 (including the origination fee) for 80% LTV loans.

The survey covers approximately 50% of all U.S. retail residential mortgage applications, 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.