ARM Application Volume Declines During Holiday-Shortened Week

July 13, 2005

WASHINGTON, D.C. - The Mortgage Bankers Association (MBA) released the Weekly Mortgage Applications Survey for the week ending July 8 which found that The Market Composite Index - a measure of mortgage loan application volume - was 791.9, a decrease of 7.2 percent on a seasonally adjusted basis from 853.4 one week earlier. On an unadjusted basis, the Index decreased 25.7 percent compared with the previous week but was up 22.0 percent compared with the same week one year earlier.

"Mortgage application volume is down 7.2 percent from the previous week, with applications for adjustable rate products experiencing an even steeper decline of 15.8 percent," said Michael Cevarr, MBA's director of member surveys. "As a result, the ARM share of applications, at 27.9 percent, is at its lowest level since March of 2004."

The seasonally-adjusted Purchase Index decreased by 6.1 percent to 489.0 from 520.8 the previous week whereas the Refinance Index decreased by 8.4 percent to 2554.3 from 2788.2 one week earlier. Other seasonally adjusted index activity includes the Conventional Index, which decreased 6.4 percent to 1196.9 from 1278.7 the previous week, and the Government Index, which decreased 19.2 percent to 116.2 from 143.9 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 2.9 percent from 826.4 to 802.6. The four week moving average is down 2.0 percent for the Purchase Index from 501.7 to 491.7 while this average is down 3.8 percent from 2715.0 to 2611.7 for the Refinance Index.

The refinance share of mortgage activity decreased to 45.1 percent of total applications from 45.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 27.9 percent of total applications from 30.7 percent the previous week.

The average contract interest rate for 30-year fixed-rate mortgages increased to 5.62 percent from 5.58 percent one week earlier, with points increasing to 1.26 from 1.14 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages increased to 5.21 percent from 5.18 percent one week earlier, with points increasing to 1.28 from 1.13 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year ARMs decreased to 4.56 percent from 4.60 percent one week earlier, with points increasing to 1.01 from 0.97 (including the origination fee) for 80 percent LTV loans.

Source: MBA


Contact ALTA at 202-296-3671 or communications@alta.org.

SoftPro, based in Raleigh, NC, offers a mature suite of products, designed specifically for the closing and title industry. Our mission is to serve our client base, with best-in-class products and services. Our products are modular so we don't force you to buy anything you don't need. You can always add on as your business grows. Unlike other software companies, we view the sale as the beginning of the relationship rather than the end. North American Title Insurance Company (NATIC) is a seasoned title insurance underwriter, helping title agents to achieve their individual business goals for more than 50 years. Today, the company conducts real estate settlement services in 39 states and the District of Columbia through a network of experienced, independent agents.