Mortgage loan applications & rates increase

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The volume of mortgage loan applications filed during the week ending April 3, 2009, increased by more than 4 percent last week, according to the Weekly Applications Survey from the Mortgage Bankers Association (MBA). In addition, the proportion of applications for home purchases compared to refinancing applications also grew.

The Market Composite Index, which measures loan application volumes for the week ending April 3 rose 4.7 percent to 1250.6 from 1194.4 the previous year. The seasonally adjusted Market Index rose 13.3 percent. On an unadjusted basis the Market Index rose 4.9 percent from the level of the previous week and 67.6 percent over the same week in 2008.

The Purchase Index increased 11.1 percent from 268.0 to 297.7 in a single week. The Conventional Purchase Index increased increased 7.7 percent while the Government Purchase Index (largely Federal Housing Administration or FHA loans) increased 17.1 percent. The Refinance Index increased 3.2 percent during the same period to 6813.5 from 6600.1 from the previous week. The refinancing share of the week’s mortgage activity declined to 77.9 percent from 79.1 percent the previous week.

On the heels of this unexpected growth in mortgage applications, mortgage interest rates rose slightly this week, according to Bankrate.com. After four straight weeks of declining mortgage rates, Bankrate’s weekly national survey indicates the average 30-year fixed mortgage rate increased to 5.2 percent with an average of 0.47 discount and origination points. Despite the increase, rates remain at levels not seen since the 1950’s. Even six months age, the average 30-year mortgage rate was a full percentage point higher at 6.2 percent.

The MBA is a national association, headquartered in Washington, D.C. that represents more than 2,400 organizations in the real estate finance industry. Bankrate’s national weekly mortgage uses data provided by the top 10 banks and thrifts in the top 10 markets.