Bailout

MBA: Mortgage refinance activity increases sharply, Purchase activity declines

By Anonymous

The Refinance Index increased 17.1 percent from the previous week and was the highest Refinance Index observed in the survey since the week ending May 15, 2009. The seasonally adjusted Purchase Index decreased 3.4 percent from one week earlier.
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The average contract interest rate for 30-year fixed-rate mortgages increased to 4.60 percent from 4.57 percent, with points increasing to 0.92 from 0.89 (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.

After falling sharply in May, the purchase index has been moving sideways for about three months. The index is 42% below the level of the last week of April (and about 32% below the last week of April using the 4-week average).

This recent collapse in the purchase index has already shown up as a decline in new home sales (counted when the contract is signed), and will show up in the July and August existing home sales report (July sales to be reported next week).

Full post as published by Calculated Risk on August 18, 2010 (boomark / email).