ARM Share of Applications Continues Recent Decline
June 29, 2005
WASHINGTON, D.C. - The Mortgage Bankers Association (MBA) Weekly Mortgage Applications Survey for the week ending June 24 found that: The Market Composite Index - a measure of mortgage loan application volume - was 778.4, a decrease of 1.1 percent on a seasonally adjusted basis from 786.8 one week earlier. On an unadjusted basis, the Index decreased 1.4 percent compared with the previous week but was up 34.2 percent compared with the same week one year earlier.
"The ARM share of applications, at 30 percent, is at its lowest level since April of 2004," said Michael Cevarr, MBA's Director of Member Surveys. "At the same time, the 30-year fixed mortgage rate declined to its lowest point since March of 2004."
The seasonally-adjusted Purchase Index decreased by 0.4 percent to 477.4 from 479.4 the previous week whereas the Refinance Index decreased by 1.8 percent to 2529.2 from 2575.0 one week earlier. Other seasonally adjusted index activity includes the Conventional Index, which decreased 1.1 percent to 1172.4 from 1184.9 the previous week, and the Government Index, which decreased 1.2 percent to 121.1 from 122.6 the previous week.
In an effort to better represent short term trends in the major indexes, four-week moving averages for seasonally-adjusted indexes will be included on a weekly basis. The four week moving average for the seasonally-adjusted Market Index is down 0.2 percent from 784.6 to 783.4. The four week moving average is down 0.4 percent for the Purchase Index from 487.7 to 485.6 and is up 0.1 percent from 2511.7 to 2515.2 for the Refinance Index.
The refinance share of mortgage activity decreased to 45.4 percent of total applications from 45.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 30.0 percent of total applications from 30.7 percent the previous week.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.47 percent from 5.63 percent one week earlier, with points increasing to 1.21 from 1.17 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.06 percent from 5.24 percent one week earlier, with points decreasing to 1.07 from 1.20 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for one-year ARMs decreased to 4.42 percent from 4.46 percent one week earlier, with points increasing to 1.01 from 0.96 (including the origination fee) for 80 percent LTV loans.