Bailout

MBA: Mortgage Purchase Applications lowest level since April 1997

By Anonymous

The Refinance Index increased 2.4 percent from the previous week. This was a smaller increase than in previous weeks, but was still the fourth consecutive weekly increase for the Refinance Index and it remains at its highest level since October 2009. The seasonally adjusted Purchase Index decreased 4.1 percent from one week earlier. The Purchase Index decreased for the fourth consecutive week and is currently at the lowest level since April 1997.
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The average contract interest rate for 30-year fixed-rate mortgages increased to 4.83 percent from 4.80 percent, with points decreasing to 1.05 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

This graph shows the MBA Purchase Index and four week moving average since 1990.

The purchase index has declined sharply following the tax credit related buying, suggesting home sales will fall sharply too. Pending home sales for April will be announced today and a large increase is expected, however May pending home sales will be much lower.

As the Michael Fratantoni, MBA?s Vice President of Research and Economics noted two weeks ago: "The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season."

Full post as published by Calculated Risk on June 02, 2010 (boomark / email).