Survey: Refinances Continue to Decline

The ""Mortgage Bankers Association"":http://www.mortgagebankers.org (MBA) released its ""Mortgage Applications Survey"":http://www.mortgagebankers.org/NewsandMedia/PressCenter/69189.htm on Wednesday, for the week ending June 5, 2009. The association's study shows that refinances, typically an effective tool for lowering distressed homeowners' monthly payments, continued to fall last week - a trend that has prevailed for several weeks now. Applications for new purchases, however, held steady.
Based on MBA's market data, the total volume of mortgage loan applications has dropped by 7.2 percent on a weekly basis. But compared to the same time last year, the number of home loan requests is up 7.6 percent.
MBA's Refinance Index decreased 11.8 percent from the previous week. The refinance share of mortgage activity plummeted to 59.4 percent of total applications, down from 62.4 percent the previous week. This is the lowest the refinance share has been since November 2008.
The association said its Purchase Index, on the other hand, increased 1.1 percent from one week earlier. The four week average is up 0.5 percent for this measurement of home buys.
MBA also reported on average mortgage interest rates for the home loan petitions submitted last week. Rates for all types of mortgage products in the survey proceeded to follow the ascensions we saw the week prior.
According to MBA's study, the average interest rate for 30-year fixed-rate mortgages (FRM) increased to 5.57 percent, up more than a quarter of a percentage point from 5.25 percent the week before.
The average rate for 15-year FRMs rose to 5.10 percent last week, also an increase of more than a quarter point, from 4.80 percent the week prior.
MBA said the average contract interest rate for one-year adjustable-rate mortgages (ARMs), also increased. Last week, the 1-year ARM rate was 6.75 percent, compared to 6.61 percent one week earlier. The ARM share of activity increased to 3.4 percent of total applications.
MBA's survey covers more than 50 percent of all U.S. retail residential mortgage applications. Respondents include mortgage bankers, commercial banks, and thrifts.