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Mortgage Applications Plunge 29% in One Week

Good rates available for qualified borrowers, but few are applying

April 2, 2008

The Mortgage Bankers Association said the previous week's higher number was bolstered by consumers seeking to refinance existing loans. That demand fell off sharply last week, according to the group's weekly survey.

For the week, the Market Composite Index, a measure of mortgage loan application volume, was 688.3, a decrease of 28.7 percent on a seasonally adjusted basis from 965.9 one week earlier. On an unadjusted basis, the Index decreased 28.1 percent compared with the previous week and was up 4.8 percent compared with the same week one year earlier.

The Refinance Index decreased 38.1 percent to 2636.0 from 4255.2 the previous week and the seasonally adjusted Purchase Index decreased 11.8 percent to 356.0 from 403.7 one week earlier. The Conventional Purchase Index decreased 11.8 percent while the Government Purchase Index (largely FHA) decreased 11.8.

On an unadjusted basis, the Purchase Index decreased 11.8 percent to 396.2 from 449.2 the previous week. The seasonally adjusted Conventional Index decreased 31.2 percent to 901.8 from 1310.4 the previous week, and the seasonally adjusted Government Index decreased 15.1 percent to 332.4 from 391.7 the previous week.

Those who want a mortgage, and who can qualify, can still find a pretty good rate. The MBA survey shows the average contract interest rate for 30-year fixed-rate mortgages increased slightly to 5.75 percent from 5.74 percent, with points increasing to 1.19 from 1.13 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages was up a bit more, increasing to 5.27 percent from 5.23 percent, with points decreasing to 1.13 from 1.15 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year ARMs decreased slightly, but is still a breathtaking 7.0 percent, with points decreasing to 1.39 from 1.72 (including the origination fee) for 80 percent LTV loans.

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