Mortgage applications as measured by the Mortgage Bankers Association Market Composite Index decreased 6.5% on a seasonally adjusted basis last week from the week before, the MBA said Wednesday. Rates also declined.
The seasonally adjusted purchase-only index dropped 6.1% from the previous week. The unadjusted Purchase Index fell 3.5% and was 19.6% below the comparable week in 2010.
On an unadjusted basis, the overall index decreased 5.5%. The Refinance Index decreased 6.5% from the previous week. The seasonally adjusted Purchase Index decreased 6.1 percent from one week earlier. The four week moving average for the seasonally adjusted Market Index is down 2.5%, down 2.2% for the seasonally adjusted Purchase Index, and down 2.7% for the Refinance Index.
The refinance share of mortgage activity decreased to 64.9% from 65.7% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.5% from 5.6%.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.84% from 5.00 percent, with points increasing to 1.30 from 0.96 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. It was the third consecutive weekly decrease for the 30-year rate. The average rate for 15-year fixed-rate mortgages decreased to 4.17% from 4.28%, with points increasing to 1.07 from 0.80.
David Goldberg, home-building analyst at UBS, said in a research note, "Although the index is flat vs. '10 levels, our recent channel checks with private builders cause us to remain cautious. Specifically, we'd note that: 1) comps get tougher in Mar./Apr., 2) tighter underwriting standards are reducing the pool of potential buyers; and 3) confidence around home prices remains tenuous at best."