By Jed Smith, Managing Director, Quantitative Research
Mortgage Bankers Association (MBA) Weekly Index
- The MBA has announced that the Market Composite Index, a measure of mortgage loan application volume, increased 5.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 4.8 percent compared with the previous week and increased 25.0 percent compared with the same week one year earlier.
- The seasonally adjusted Purchase Index increased 3.9 percent, the third consecutive weekly gain. The large swings in mortgage rates over the past month have resulted in see-saw like activity in the Refinance Index. By contrast, the purchase activity has not been deterred by interest rate volatility, and has continued to trend gradually upward.
- The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.15 percent from 5.38 percent, with points decreasing to 0.98 from 1.18 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
- The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.52 percent from 4.71 percent, with points decreasing to 0.93 from 1.20 (including the origination fee) for 80 percent LTV loans.
- The average contract interest rate for one-year ARMs decreased to 6.66 percent from 6.71 percent, with points decreasing to 0.07 from 0.08 (including the origination fee) for 80 percent LTV loans.
What does today’s data mean for consumers?
- The report is consistent with the consensus that home sales are starting to recover in many markets from their earlier lows. Purchase applications worth their way through the system and result in home sales.
- Interest rates continue to be at levels that will support a recovery in the existing home sales markets nationwide. Relatively low interest rates coupled with current price levels provide a buying opportunity for the consumer and support a housing recovery.
Daily Forecast Update
- NAR monthly official forecast as of August 4
- GDP 2009 Q3: + 1.1%
- GDP 2009 Q4: +1.3%
- GDP 2010 Q1: +2.5%
- Unemployment rate by the end of 2009: 10.5%
- Average 30-year fixed mortgage rate by the end of 2009: 5.5%
Copyright National Association of REALTORS®, Reprinted with permission.
