Friday, September 3, 2010

Refinance Index rises to highest level in over a year

The Mortgage Bankers Association MBA today released its Weekly Mortgage Applications Survey for the week ending August 27, 2010.� The Market Composite Index, a measure of mortgage loan application volume, increased 2.7 percent on a seasonally adjusted basis from one week earlier.� On an unadjusted basis, the Index increased 2.3 percent compared with the previous week.

The Refinance Index increased 2.8 percent from the previous week and is at its highest level since May 1, 2009. The seasonally adjusted Purchase Index increased 1.8 percent from one week earlier. The unadjusted Purchase Index decreased 0.4 percent compared with the previous week and was 37.0 percent lower than the same week one year ago.

"Refinancing activity picked up again last week, reaching new 15-month highs, as borrowers took advantage of even lower mortgage rates.� The drop in mortgage rates was in line with Treasury rates as the latest data continue to show weak economic growth and an exceptionally weak housing market," said Michael Fratantoni, MBAs Vice President of Research and Economics.� "The sharp decline in MBAs Purchase Application index in May had provided a clear leading indicator of the drops in new and existing home sales that were reported for June and July.� Despite the slight increase in purchase activity in the past week, the continued low level of purchase applications indicates we are unlikely to see an increase in new home sales reported for August or existing home sales reported for September."

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