Applications Plunge

The Market Composite Index, an overall measure of mortgage applications, dropped to 972.4 on a seasonally adjusted basis during the week ended July 25 from 1284.3 the week before, according to the Mortgage Bankers Association of America's Weekly Mortgage Applications Survey.On an unadjusted basis, applications were down 23.7% on the week and 2.4% from the level recorded a year earlier. On a seasonally adjusted basis, the Purchase Index decreased from 442.4 to 426.9, and the Refinance Index declined from 6181.2 to 4145.8. Refinancings represented 60.4% of total applications, down from 68.7% the previous week, while adjustable-rate mortgages accounted for 20.6%. "The level of applications to purchase homes showed only a modest drop and is still near all-time highs," said Jay Brinkmann, the MBA's vice president of research and economics. "In contrast, refinance applications have fallen to the lowest level seen this year and are down more than 50% from where they were just four weeks ago -- not surprising given the sharp increase in rates since mid-June." The average contract interest rate for 30-year fixed-rate mortgages rose from 5.72% to 5.87%, and points (including the origination fee) increased from 1.53 to 1.64 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mbaa.org.