The Market Composite Index, a measure of mortgage loan application volume, decreased 2.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1.5 percent compared with the previous week.
The seasonally adjusted Purchase Index increased 6.7 percent to its highest level of the year. The unadjusted Purchase Index increased 7.0 percent compared with the previous week and was 16.8 percent lower than the same week one year ago. The four week moving average is up 0.9 percent.
"Purchase application volume increased last week reaching the highest level of the year, but remains relatively low by historical standards, at levels last seen in 1997," said Michael Fratantoni, MBA's Vice President of Research and Economics. "The increase last week was due to a sharp increase in applications for government loans. Borrowers were likely motivated to apply before a scheduled increase in FHA insurance premiums that became effective last Friday."
The Refinance Index decreased 6.2 percent to its lowest level since February 25, 2011, on a seasonally adjusted basis. The four week moving average is down 3.2 percent. The refinance share of mortgage activity decreased to 61.2 percent of total applications from 64.3 percent the previous week. This is the lowest refinance share since May 7, 2010.
“Rates were flat last week, but refinance activity fell, as the pool of borrowers who have both the incentive and the ability to qualify for a refinance continues to shrink.” said Michael Fratantoni, MBA’s Vice President of Research and Economics. Roughly 168 hours earlier, in the aptly titled piece : "Pool of Eligible Refinance Candidates Dried Up at Current Rates," we shared similiar observations: "Recently lower mortgage rates have done little to motivate potential refinance candidates." said MND's Managing Editor Adam Quinones. "This isn't a big surprise as most qualified borrowers simply don't have an incentive to refinance because they already did last year when rates were near record lows. Other than that, qualification issues continue to prevent many folks from lowering their monthly payment. We do however expect a modest increase in purchase activity heading into the spring buying season."
(incidentally, purchase apps picked up this week as refinance apps declined... Go figure...)
READ MORE: Pool of Eligible Refinance Candidates Dried Up at Current Rates
READ MORE: Refinance Demand Stale as Rates Rally
...(read more)
Source: http://www.mortgagenewsdaily.com/04062011_mba_applications.asp
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