U.S. mortgage applications drop by 9.5% last week

February 17, 2011 12:28 pm 

WASHINGTON, Feb. 17 — The Market Composite Index of U.S. mortgage applications, a measure of mortgage loan application volume, decreased 9.5 percent in the week ending February 11, 2011 on a seasonally adjusted basis from the previous week, according to the latest Weekly Mortgage Applications Survey released Wednesday by the U.S. Mortgage Bankers Association (MBA).

MBA said the Refinance Index decreased 11.4 percent from the prior week and was the lowest point recorded in the survey since the week ending July 3, 2009.

The seasonally adjusted Purchase Index decreased 5.9 percent from one week earlier.

"Mortgage rates remained above 5 percent last week, up almost a full percentage point from their October lows, and refinance volume continued to drop," said Michael Fratantoni, MBA's Vice President of Research and Economics. "Applications for home purchases also declined on a seasonally adjusted basis. Buyers have not returned to the market as rising rates have reduced affordability, to some extent."

The four week moving average for the seasonally adjusted Market Index dropped 4.5 percent. The four week moving average was down 1. 9 percent for the seasonally adjusted Purchase Index, while this average was down 6.2 percent for the Refinance Index.

The average contract interest rate for 30-year fixed-rate mortgages last week decreased to 5.12 percent from 5.13 percent, and the average contract interest rate for 15-year fixed-rate mortgages increased to 4.34 percent from 4.29 percent.

The survey covers over 50 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. (PNA/Xinhua)



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