According to the Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending August 12, mortgage applications increased 4.1 percent from one week earlier.
"Unprecedented volatility in the stock market last week amid additional signs that the economy has slowed led to further drops in mortgage rates, with the 15-year rate reaching a new low for the MBA survey," said Mike Fratantoni, MBA's Vice President of Research and Economics. "Purchase application activity fell sharply over the previous week, likely the result of potential homebuyers hesitant to purchase in this highly volatile and uncertain environment."
Fratantoni continued, "Refinance application volume increased substantially for the week, although there was substantial variation across the market. The big differences in refinance volumes were likely driven by the decisions of some lenders not to drop rates last week, largely due to the need to manage their pipelines."
The refinance share of mortgage activity increased to 78.8 percent of total applications from 75.6 percent the previous week, the highest the refinance share has been since November 2010. The adjustable-rate mortgage (ARM) share of activity decreased to 5.8 percent from 6.1 percent of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.32 percent from 4.37 percent, with points decreasing to 0.87 from 1.07 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also decreased from last week. The 30-year fixed contract rate has decreased for three straight weeks and is at a new low for this year.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.47 percent from 3.52 percent, with points increasing to 1.08 from 0.96 (including the origination fee) for 80 percent LTV loans. The effective rate also decreased from last week. The 15-year contract rate is at lowest level in the history of this survey.
source: World Property Channel
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