"Purchase applications fell last week, driven primarily by a sharp decrease in government purchase applications as new, higher FHA premiums went into effect," said Michael Fratantoni, MBA's Vice President of Research and Economics. "This decrease reverses a 20% increase in government purchase applications over a four-week period, which was likely driven by borrowers attempting to beat this deadline."
The Market Composite Index, a measure of mortgage loan application volume, decreased 5.6% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5.6% compared with the previous week. The Refinance Index decreased 0.6% from the previous week. The seasonally adjusted Purchase Index decreased 13.6% to its lowest level since Feb. 25, 2011, driven by a 26.6% decrease in government purchase applications. The unadjusted Purchase Index decreased 12.8% compared with the previous week and was 28.8% lower than the same week one year ago.
The four week moving average for the seasonally adjusted market Index is down 2.4%. The four week moving average is down 0.8% for the seasonally adjusted Purchase Index, while this average is down 3.2% for the Refinance Index.
The refinance share of mortgage activity increased to 61.6% of total applications from 58.5% the previous week. This is the highest refinance share of the month. The adjustable-rate mortgage (ARM) share of activity remained unchanged from the previous week at 6.5% of total applications.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.80% from 4.83%, with points decreasing to 1.01 from 1.06 (including the origination fee) for 80% loan-to-value (LTV) ratio loans. The effective rate also decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.03% from 4.07%, with points decreasing to 0.96 from 1.02 (including the origination fee) for 80% LTV loans. The effective rate also decreased from last week.