Mortgage Applications Fall 2.7%

By Sari R. Updated on 9/25/2013

For the week ending March 23, 2012, the number of home mortgage applications nationwide dropped 2.7% from the earlier week according to MBA (Mortgage Bankers Association).  Additionally, refinance applications also fell.  This was the sixth consecutive week that refinancing was on a down trend.

The composite index, which represents the overall loan application volume, dropped as the refi index fell 4.6%.  This demonstrates a significant percentage decline in refinancing activity as that activity’s share of all mortgage activity dropped to 71.9% from 73.4%.  This is the lowest refinance activity level since July 2011.  This sudden drop in refinancing is tied to a 12% drop off in government refinance activity.  Even though there have been new programs such as the HARP 2 Refinance program put in place by the government, there has been this drop off. On the flip side, the purchase activity grew 3.3% from the earlier week.

The rise of  the 30-year fixed mortgages did not help this cause.  On a conforming loan, the 30-year fixed rose to 4.23% from 4.19%, while the average contract mortgage rate for a 30-year jumbo loans increased to 4.54%, up from 4.49%. The 30-year FHA loan climbed from 3.93% to 3.96% while the 15-year, FRM rose to 3.50%, up from 3.47%. The  5/1 ARMs rose to 3% from 2.90% last week.