November 10 2010 (Chris Moore)

The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending November 5, 2010. The Market Composite Index, a measure of mortgage loan application volume, increased 5.8 percent on a seasonally adjusted basis from one week earlier, but the Index’s four week moving average is still down 1.9 percent.

On an unadjusted basis, the Index increased 5.4 percent compared with the previous week.

The seasonally adjusted Purchase Index increased 5.5 percent from one week earlier. The four week moving average is up 1.0 percent for the seasonally adjusted Purchase Index. This is the third consecutive weekly increase in purchase applications. The unadjusted Purchase Index increased 3.1 percent compared with the previous week and was 14.0 percent lower than the same week one year ago.

The conventional purchase index increased 5.4 percent to its highest level since May of this year, on a seasonally adjusted basis. On a non-seasonally adjusted basis, the conventional purchase index was at the highest level observed since early October.

Michael Fratantoni, MBA’s Vice President of Research and Economics, stated, “Although mortgage rates were little changed following the Federal Reserve’s decision to purchase $600 billion of Treasury bonds over the next eight months, mortgage applications increased last week. The increases in purchase applications we have seen over the past couple of weeks align with the better than expected news from October’s employment report and other data indicating some improvement in the economy’s growth prospects. Refinance applications increased as rates continued to hover near record lows.”

The refinance share of mortgage activity increased to 81.7 percent of total applications from 81.3 percent the previous week, an increase of 6.0 percent from the previous week. The four week moving average for the Refinance Index is down 2.6 percent. The adjustable-rate mortgage (ARM) share of activity decreased to 5.3 percent from 5.4 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages remained unchanged at 4.28 percent, with points decreasing to 1.05 from 1.07 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate remained unchanged at 3.64 percent, with points also remaining unchanged at 1.08 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

Tags: MBA, home purchase applications, mortgage rates, fixed rate mortgage, adjustable rate mortgage, refinance, interest rate