Mortgage Applications Indices

(1-5-11 Release Date)

31Dec 24Dec 17Dec 10Dec 26Nov

Refi Index 2,115.4 2,036.9 2,196.1 2,910.9 2,974.4

Purchase 199.8 201.4 195.3 200.3 210.9

Index

Source: Mortgage Bankers Association

Highlights

• The refi index rose by 3.9% to 2,115.4 for the week ending December 31.Ø The purchase index fell by just 0.8% to 199.8 for the week ending December 31.
• The refi index is down 27.9% from four weeks ago, while the purchase index is down 5.3% from four weeks ago.
• 30-year mortgage rates ended the week at 4.82%, down 11 basis points from a week ago and up 16 basis points from four weeks ago.
• One-year adjustable mortgage rates ended the week at 7.08%, down 8 basis points from a week ago and unchanged from four weeks ago.
• Refinance applications accounted for 71% of total applications, while purchase applications accounted for 29%.

Analysis

Improvement in mortgage applications is entirely due to refinancings due historically low mortgage rates. Unfortunately, mortgage applications to purchase homes have been dreadful for some time now. A modest expansion, sluggish job growth and unsteady consumer confidence have been the primary contributors to weak housing demand.

Looking forward, modest growth in housing demand is expected during the next several quarters; but with a continuing foreclosure problem combined with depressed home values, the nation’s housing sector is far from a healthy recovery. Hopefully, sometime in 2012 signs of health will be seen.