Refi Applications Dips 9% This Week in U.S. as Rates Increase

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According to the Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending August 17, 2012, mortgage applications decreased 7.4 percent from one week earlier.

The Market Composite Index, a measure of mortgage loan application volume, decreased 7.4 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 8 percent compared with the previous week.

The Refinance Index decreased 9 percent from the previous week to the lowest level since early July.

The seasonally adjusted Purchase Index increased 0.9 percent from one week earlier. The unadjusted Purchase Index decreased 0.9 percent compared with the previous week and as 3.0 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 80.0 percent of total applications from 81.0 percent the previous week. The HARP share of refinance activity was unchanged from last week at 24 percent. The adjustable-rate mortgage (ARM) share of activity increased to 4.0 percent of total applications.

During the month of July, the investor share of applications for home purchase was at 5.7 percent, a slight increase from 5.5 percent in June.  This change was led by an 8.7 percent gain in the Pacific region.  In addition, the share of purchase mortgages for second homes increased to 5.8 percent in July from 5.6 percent in June.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 3.86 percent from 3.76 percent, with points decreasing to 0.42 from 0.47 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 4.11 percent from 4.03 percent, with points increasing to 0.42 from 0.27 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.62 percent from 3.53 percent, with points increasing to 0.50 from 0.49 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.15 percent from 3.12 percent, with points increasing to 0.44 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 2.74 percent from 2.73 percent, with points increasing to 0.38 from 0.36 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.