Posted on 09/10/2003 5:46:51 AM PDT by Starwind
U.S. mortgage demand climbs in Sept 5 week-MBA
Wednesday September 10, 7:02 am ET
NEW YORK, Sept 10 (Reuters) - The Mortgage Bankers Association of America (MBA) weekly mortgage application survey for the week ended Sept 5. . Market Composite Index (seasonally adjusted) . Latest Previous Pct 4 Weeks 1 Year . Week Week Change Ago Ago . ------------------------------------ Market Index 771.8 628.7 22.8 824.6 1238.2 Purchase Index 408.8 396.1 3.2 409.6 401.6 Refinancing Index 2883.6 1981.5 45.5 3238.4 6104.3 Fixed-rate Index 633.9 505.4 25.4 669.3 1138.3 Adjustable-rate 3659.4 3208.2 14.1 4076.0 3331.9 Conventional Market Indices (seasonally adjusted) Conventional Index 1112.3 879.8 26.4 1183.7 1801.7 Purchase Index 596.5 571.9 4.3 597.9 559.7 Refinancing Index 3209.3 2131.7 50.6 3565.3 6851.8 Fixed-rate Index 898.4 693.9 29.5 947.5 1640.2 Adjustable-rate 5499.1 4692.3 17.2 6025.4 5114.4 Government Market Indices (seasonally adjusted) Government Index 203.9 209.6 -2.7 225.5 297.6 Purchase Index 140.7 145.2 -3.1 141.0 175.7 Refinancing Index 1168.3 1192.4 -2.0 1515.2 2157.8 Fixed-rate Index 193.6 191.6 1.0 205.6 302.5 Adjustable-rate 427.7 600.1 -28.7 656.4 188.7 Mortgage Applications - Pct Change (not seasonally adjusted) . One Week Four Weeks One Year . Ago Ago Ago . -------------------------------- Total -2.9 -27.8 -37.7 Purchase -19.2 -26.6 2.0 Refinancing 16.4 -28.8 -52.8 Fixed-rate mortgages -0.7 -26.9 -44.3 Adj.-rate mortgages -9.7 -30.8 9.8 Composition of Activity (in pct) - Week Ended Sept 5 . Total: Conventional: . No of $ Volume No. of $ Volume . Loans of Loans Loans of Loans . ----------------------------------- -Refinancing 55.0 48.6 57.2 49.9 -Adjustable-rate 21.6 34.1 23.0 35.8 -Balloon 1.0 0.9 1.1 1.0 Federal Housing Administration (FHA) and Veteran Affairs (VA): -Refinancing 35.4 31.5 -Adjustable-rate 9.2 11.6 . Current mortgage rates: . Change in Contract Rate . (in basis points) . Effective Total Contract 1 Week 4 Weeks 1 Yr . Rate Points Rate Ago Ago Ago . -------------------------------------------------- FRM 30-Year* 6.27 1.41 5.99 -26 -1 -11 FRM 15-Year* 5.64 1.39 5.29 -28 2 -15 Balloon 7-Year* 5.81 1.44 5.45 -17 31 19 Balloon 5-Year* 5.26 1.37 4.92 -8 -38 -15 ARM,1-Year* 3.85 1.14 3.57 -23 13 -59 FHA 203 (b) 6.34 0.97 6.18 -19 -4 -7 *For 80 percent loan-to-value For complete MBA data for the latest week, please click (MTGEBKRS).
(Recasts, adds quotes from Mortgage Bankers Association)NEW YORK, Sept 10 (Reuters) - A drop in interest rates sparked a rebound in mortgage refinancing requests after nine weeks of declines and boosted the overall number of applications Americans filed for mortgages last week, according to an industry survey.
The Mortgage Bankers Association of America said on Wednesday its seasonally adjusted gauge of overall mortgage requests rose to 771.8 for the week ended Sept. 5, up 22.8 percent from the previous week's.
The reading is the highest in four weeks but still well below the record high of 1,856.7 in the last week of May. "With mortgage rates decreasing for the first time in over two months, consumers are taking advantage of a dip in interest rates," said Douglas Duncan, the group's chief economist.
It is unclear whether last week's rise in refinancing applications to their highest level in a month was a trend reversal or the last gasp of the unprecedented boom.
"We are on the downside of the refinancing wave," Duncan said. "Consumers are looking at fewer opportunities." Worries over rising rates and the fallout on housing and refinancing jolted the stock market on Tuesday.
Wall Street investment bank Goldman Sachs warned of weaker consumer spending that could hurt retailers like Home Depot Inc. (NYSE:HD - News) and Federated Department Stores (NYSE:FD - News) in the belief the housing turnover is peaking and may decelerate later this year.
Chief executives at Washington Mutual Inc. (NYSE:WM - News) and Countrywide Financial Corp. (NYSE:CFC - News), the No. 2 and No. 3 U.S. mortgage lenders, said at a financial conference in New York on Tuesday that their companies saw double-digit declines in mortgage applications in August versus July.
Economists and the Federal Reserve have acknowledged the key role of refinancing in supporting the economy when it turned sour three years ago. Refinancing, spurred by low interest rates, freed up billions of dollars in cash for consumers to spend.
REFINANCING REBOUNDS
Demand for refinancing has fallen sharply in recent weeks prompted by the upward spike in mortgage rates. But rates slid on Friday along with Treasury yields following a poor U.S. payrolls report that showed a surprise decline in jobs in August, crimping optimism the job market would finally recover.
Friday's drop in Treasury yields pushed average 30-year mortgage rates below 6 percent for the first time since mid-July.
Interest rates, excluding fees, on 30-year fixed-rate mortgages, the home loan held by most U.S. homeowners, averaged 5.99 percent, down from the prior week's 6.25 percent.
"The consumers who missed the (rate) bottom said, 'We better move now,'" the association's Duncan said.
The group's seasonally adjusted gauge for loan applications to refinance increased to 2,883.6, up 45.5 percent from the previous week but 71 percent below the all-time peak of 9,977.8 set in the week ending May 30.
The group's index of demand for loans for home purchases rose to 408.8, up 3.2 percent. Demand for loans to buy homes has dropped only slightly in recent months, supported by strong home sales.
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