The Market Composite Index, a measure of mortgage loan application volume, decreased 1.5 per cent on a seasonally adjusted basis from one week earlier….
The Refinance Index increased 14.5 per cent from the previous week and the seasonally adjusted Purchase Index decreased 27.1 per cent from one week earlier. This is the lowest Purchase Index observed in the survey since May of 1997. …
“Purchase applications plummeted 27 per cent last week and have declined almost 20 per cent over the past month, despite relatively low interest rates. The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season. In fact, this drop occurred even as rates on 30-year fixed-rate mortgages continued to fall, and at 4.83 per cent are at their lowest level since November 2009,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “However, refinance borrowers did react to these lower rates, with refi applications up almost 15 per cent, hitting their highest level in nine weeks.
… The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.83 per cent from 4.96 per cent, with points increasing to 1.08 from 0.91 (including the origination fee) for 80 per cent loan-to-value (LTV) ratio loans.
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This graph shows the MBA Purchase Index and four week moving average since 1990.
There was a spike in purchase applications in April, followed by a decline to a 13 year low last week. As Fratantoni noted: “The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season.”