Overall Application Volume Drops, While Purchase Index Rises

Mortgage applications fell again last week, dropping 0.2% on a seasonally adjusted basis from the week before, according to the Mortgage Bankers Association (MBA).

Although the Refinance Index decreased 2.5% from the previous week, the seasonally adjusted Purchase Index increased 9.3% from one week earlier and is the highest Purchase Index observed in the survey since the week ending May 7.

The unadjusted Purchase Index increased 9.1% compared with the previous week and was 34.7% lower than the same week one year ago.

"The increase in purchase activity was led by a 17.2 percent increase in Federal Housing Administration (FHA) applications, while conventional purchase applications also increased by 3.6 percent," says Jay Brinkmann, the MBA's chief economist. "This is the second straight weekly increase in purchase applications and the highest Purchase Index level since the expiration of the home-buyer tax-credit program.’

A possible drive of last week's increase in purchase activity, Brinkmann says, was a desire by borrowers to submit applications before the FHA's new credit-score and down-payments requirements took effect Monday.

SOURCE: Mortgage Bankers Association


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