US mortgage applications dip on weak market
Updated: 2012-02-02 10:51
WASHINGTON - The US mortgage applications last week edged down although mortgage rates remained near record lows, signaling the housing market was still far from recovery, showed the latest Weekly Mortgage Applications Survey released Wednesday by the US Mortgage Bankers Association (MBA).
The MBA said that the Market Composite Index of US mortgage applications, a measure of mortgage loan application volume, decreased by 2.9 percent in the week ending January 27, 2012 on a seasonally adjusted basis from the previous week.
The Refinance Index decreased 3.6 percent from the previous week, while the seasonally adjusted Purchase Index declined 1.7 percent.
However, the four-week moving average for the seasonally adjusted Market Index edged up 4.11 percent from the previous week. The four-week moving average climbed 4.22 percent for the seasonally adjusted Refinance Index, while this average ticked up 2.48 percent for the Purchase Index, according to the survey.
In addition, the association said that the average contract interest rate for 30-year fixed-rate mortgages last week decreased to 3.96 percent from 3.97 percent, while the average contract interest rate for 15-year fixed-rate mortgages dropped to 3.36 percent from 3.40 percent."
Although total application volume dropped on an adjusted basis relative to last week, refinance volume remains high, with survey participants reporting that the expanded Home Affordable Refinance Program (HARP) continued to roughly 10 percent of their refinance activity," said Michael Fratantoni, MBA's Vice President of Research and Economics.
The US government last October announced a series of changes to the HARP to make it easier for homeowners to refinance their mortgage loans, which is considered to stimulate mortgage refinance activities.
US President Barack Obama said on Wednesday he was sending Congress a new plan that lowered the standard to all mortgages, including private-held ones. It also streamlined the refinancing process and simplified the mortgage disclosure forms.
The survey covers over 75 percent of all US retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.