Tax Credit Seen Pushing Weekly Apps to October High

The homebuyer tax credit deadline pushed purchase mortgage applications up to their highest level since last October, as overall applications have increased from the preceding week, the Mortgage Bankers Association's Market Composite Index for the week ended April 23 found. The MCI increased 4.0% on a seasonally adjusted basis from one week earlier and on an unadjusted basis, it increased 5.1%. According to Michael Fratantoni, MBA's vice president of research and economics, "Purchase applications were up 13% over the previous week and almost 24% over the last month, driven by significant increases in both conventional and government purchase applications. We also saw the Government share of applications for purchasing a home increase to over 50% of all purchase applications last week, which is the highest in two decades." The seasonally adjusted Purchase Index increased 13.0% from one week earlier, which MBA said is the third consecutive weekly increase in purchase applications and the highest Purchase Index recorded in the survey since the week ending October 2, 2009. The Conventional Purchase Index increased 9.4% from the previous week while the Government Purchase Index increased 16.7%. The Refinance Index declined by 2.1% from the previous week. The market share of refi applications continues to decline, falling to its lowest point since the first week of July 2009; refis made up 51.9% of mortgage applications, down from 55.7% the previous week. The market share of adjustable rate mortgage applications increased to 6.3% from 6.0%. The average interest rate for the 30-year fixed rate mortgage fell six basis points from 5.08% to 5.02% for the current week with points increasing to 0.92 from 0.91 (including the origination fee) for loans with an 80% percent loan-to-value ratio, the association reported. The average contract interest rate for 15-year FRMs declined 4 bps to 4.34%. The average contract interest rate for one-year ARMs was unchanged from the previous week's 7.03%.