Mortgage Apps Drop Nearly 12 Percent

Mortgage application activity reached a four year low, falling 11.6 percent on a seasonally-adjusted basis during week ending December 28, 2007. According to the Mortgage Bankers Association, its Market Composite Index — a measure of mortgage loan application volume — was 533.9, a decrease of 11.6 percent on a seasonally adjusted basis from 603.8 one week earlier.

(The index is calibrated to March 16, 1990; a reading of 533.9 means that application activity is a little more than 5 times greater than when the index was first established.)

This week’s drop comes on the heels of a 7.9 percent fall in application volume one week earlier, which has dragged the four week moving average for the seasonally adjusted Market Index down 9.0 percent to 650.8 from 715.3.

Refinancing activity continued to register a nosedive, decreasing 15.4 percent on a weekly comparison basis; purchase volume fell 8.5 percent to 360.8, its lowest level in four years.

Refinance share of overall mortgage activity decreased to 50.9 percent of total applications from 53.0 percent the previous week, the MBA said. ARM share of activity decreased to 9.8 from 10.4 percent of total applications.

For more information, visit http://www.mortgagebankers.org.