Purchase Applications Grew As Tax Credit Deadline Loomed

The Mortgage Bankers Association's (MBA) Market Composite Index, a measure of mortgage loan application volume, increased 4% on a seasonally adjusted basis last week as compared to the prior week. On an unadjusted basis, the index increased 5.1% compared with the previous week.

The Refinance Index decreased 2.1% from the previous week, and the seasonally adjusted Purchase Index increased 13% from one week earlier. This is the third consecutive weekly increase in purchase applications and the highest Purchase Index recorded in the survey since the week ending Oct. 2, 2009, the MBA says.

The Conventional Purchase Index increased 9.4% from the previous week, and the Government Purchase Index increased 16.7%. The unadjusted Purchase Index increased 14.1% compared with the previous week and was 10.3% higher than the same period one year ago.

‘Purchase application activity continued to increase in the last week of the home buyer tax credit program,’ says Michael Fratantoni, MBA's vice president of research and economics. ‘Purchase applications were up 13 percent over the previous week and almost 24 percent over the last month, driven by significant increases in both conventional and government purchase applications. We also saw the Government share of applications for purchasing a home increase to over 50 percent of all purchase applications last week, which is the highest in two decades.’
The refinance share of mortgage activity decreased to 51.9% of total applications from 55.7% the previous week. This is the lowest refinance share observed in the survey since the week ending July 3, 2009. The adjustable-rate mortgage share of activity increased to 6.3% from 6% of total applications from the previous week.

SOURCE: Mortgage Bankers Association


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