Fewer consumers applied for new residential mortgages and refinancing last week, according to a weekly survey released on Wednesday by the Mortgage Bankers Association (MBA). For the week ending February 19, the index used to measure mortgage loan application volume decreased 8.5% from the previous week, seasonally-adjusted. Unadjusted, the index dropped 7.3% from the previous week.

For purchases, the seasonally-adjusted index decreased 7.3% from the week before, putting the index at its lowest level since May 1997, the MBA reported. The unadjusted Purchase Index decreased 3.6% compared with the previous week and was 13.4% lower than the same week one year ago.

"As many East Coast markets were digging out from the blizzard last week, purchase applications fell, another indication that housing demand remains relatively weak," said Michael Fratantoni, MBA's Vice President of Research and Economics. "With home prices continuing to drift amid an abundant inventory of homes on the market, potential homebuyers do not see any urgency to lock in purchases."

The index that measures volume for refinance applications was down 8.9% from the previous week, but the four week moving average for this index is up 3.2%. The four week moving average for purchases was down 2.1%, seasonally-adjusted, and the overall market index is up 1.6% from the previous week.

According to the MBA report, the average mortgage interest rate for an 80% loan-to-value ratio, thirty-year fixed rate mortgage increased to 5.03%, up from 4.94% in the previous week. Points increased to 1.34 from 1.09 in the previous week, and include the origination fee.

For fifteen-year mortgages with an 80% loan-to-value ratio, rates changed little - increasing slightly to 4.35% from 4.33% in the previous week. Point increase was comparable to that of a thirty-year mortgage, up to 1.31 from 1.02 in the previous week.

For one-year adjustable rate mortgages with an 80% loan-to-value ratio, the average interest rate increased to 6.80% from 6.67% in the previous week. Points changed little, increasing to .33 from .32, including the origination fee.


Source:
Mortgage Bankers Association