Mortgage Apps and Refinances Drop

The ""Mortgage Bankers Association"":http://www.mortgagebankers.org (MBA) today released its Weekly Mortgage Applications Survey for the week ending February 6, 2009. The Market Composite Index, a measure of mortgage loan application volume, was 600.6, a decrease of 24.5 percent from one week earlier. The index decreased 43.9 percent compared with the same week one year earlier.
Based on MBA's data, the Refinance Index also decreased, dropping 30.3 percent from the previous week. The seasonally adjusted Purchase Index decreased 9.8 percent, reaching its lowest level since the end of 2000. The seasonally adjusted Conventional Purchase Index decreased 11.1 percent, while the Government Purchase Index (largely FHA) decreased 7.0 percent.
The refinance share of mortgage activity decreased to 66.7 percent of total applications from 73.2 percent the previous week, MBA said. The adjustable-rate mortgage (ARM) share of activity increased to 2.5 percent from 2.1 percent of total applications from the previous week.
According to MBA's study, which covers approximately 50 percent of all U.S. retail residential mortgage applications, the decline in activity comes even though interest rates fell slightly last week.
The average contract interest rate for 30-year fixed-rate mortgages (FRMs) decreased to 5.19 percent from 5.28 percent for 80 percent loan-to-value (LTV) ratio loans, based on MBA's data. The average rate for 15-year FRMs decreased to 5.00 percent from 5.15 percent. But the average interest rate for one-year ARMs increased to 6.22 percent from 6.09 percent, MBA said.