Purchase Apps Seen Rising in Week as Refis Drop

Purchase mortgage applications were up last week as the homebuyer tax credit program moved toward its month-end deadline, but overall applications were down from the preceding week as refinancings declined, according to the Mortgage Bankers Association. The MBA's Market Composite Index for the week ended April 23 fell 2.9% on a seasonally adjusted basis compared with one week earlier. On an unadjusted basis, the Index decreased 1.9% compared with the previous week. According to Michael Fratantoni, MBA's vice president of research and economics, "Purchase applications were up almost 9% from a month ago, with a disproportionate share of the increase due to government purchase applications. Government applications for purchasing a home accounted for almost 49% of all purchase applications last week." The seasonally adjusted Purchase Index increased 7.4% from one week earlier and reached its highest level since October 2009. The government purchase index increased 11.9% from last week on a seasonally adjusted basis, while the conventional purchase index increased 3.5%. The Refinance Index declined by 8.8% from the previous week. The market share of refi applications fell to 55.7%, its lowest point since August 2009. This was down from 60% for the previous week. The market share of adjustable-rate mortgage applications was unchanged at 6.0%. The average contract interest rate for the 30-year fixed rate mortgage rose four basis points from 5.04% to 5.08% for the current week with points decreasing to 0.91 from 0.98 (including the origination fee) for loans with an 80% percent loan-to-value ratio, according to the association. The average contract interest rate for 15-year FRMs also had a 4 bps increase to 4.38%. The average contract interest rate for one-year ARMs increased 8 bps to 7.03%.