Architectural billings increased slightly after two relatively soft months, but the increase represents a decline in demand for design services according to a report released by the American Institute of Architects (AIA) Wednesday. The new projects inquiry index, a measure of people asking for architecture work, dropped substantially from 57.7 to 53.1.

The firm reported that its monthly Architecture Billings Index (ABI) rose almost two full points to 47.9 in July from 46.0 in June. The index was 45.8 in May and 48.5 in April. The AIA sets a benchmark value of 50 for its indexes: anything above that number is considered to be positive and anything below negative.

The ABI’s monthly data is derived from questionnaires distributed to a panel of AIA member-owned firms. Participants are asked whether their billings increased, decreased, or stayed the same in the month that just ended. According to the proportion of respondents choosing each option, a score is generated, which represents an index value for each month.

AIA reported the new project inquiries index declined substantially in July to 53.1 from 57.7.

Kermit Baker, AIA's chief economist, told HousingWire in June that the decrease in demand for design services is counteraction against over improving or over investing in a home. In 2005, credit was cheap and house prices were appreciating rapidly. Over the five years, however, Baker said the houses became smaller.

“There’s a greater concern over affordability,” he said in an interview. “Now, we’re seeing less of [special design floorplans] and more of the general purpose space, more open space in design, more flexible space.”

The regional buildings index was highest in the South at 47.9, followed by the Northeast at 47.2, the Midwest at 46.7, and the West at 45.2.

The index was the highest in the commercial/industrial sector (50.4), followed by the institutional sector (47.9), the multi-family residential secotr (47.5) and the mixed practice sector (42.9).

Write to Christine Ricciardi.

Bank of America Merrill Lynch Global Research announced Wednesday the appointment of Michelle Meyer as senior US economist of the Developed Markets Economics Research team. In this position, Meyer will drive the group’s housing-industry forecasts as well as support the rates and currencies trading desk.

She will report to Ethan Harris, head of Developed Markets and Economics Research.

Meyer's "expertise in researching the housing market, along with her ability to analyze macroeconomic indicators and fiscal policy issues, will be a valuable asset to our clients," according to Harris.

Meyer joins the BofAML global research from Barclays Capital, where she served as senior US economist. Prior to that, she was a US economist at Lehman Brothers for over three years. Meyer earned a B.A. and an M.A. in economics from Boston University.

Bank of America Merrill Lynch Global Research tracks more than 3,100 stocks globally and ranks them in numerous external surveys.

Write to Christine Ricciardi.

Mortgage refinancings rose 17.1% last week and now account for 81.4% of total mortgage applications, according to the Mortgage Bankers Association.

The association said in its weekly survey that the refinance index for the week ended Aug. 13 reached its highest level since May 2009, and the refinancing share of overall mortgage applications last week was at the highest rate since January 2009.

Mortgage rates hit all-time lows earlier this year and are still at levels not seen for decades, with many lenders currently offering 15-year fixed-rate loans lower than 4% and 30-year fixed in the 4.25%-4.5% range.

MBA's seasonally adjusted market composite index, which measures weekly gross mortgage loan applications, rose 13% from the prior week. The seasonally adjusted purchase index declined 3.4% from a week earlier and is 38.6% lower than the same week a year ago, according to MBA.

In a separate survey, Mortgage Maxx said household application activity for the week rose 5.9% from the previous week.

The firm's Mortgage Application Index — or MAX — measures household activity in the application process by adjusting total application volume to count multiple submissions from a single household as one participant.

MAX publisher Paul Descloux said the index "shows strength as the 10-year treasury again reaches crisis mode yields. Not only have long dated mortgages fallen to 4.5%, but some old favorites like 5/1 interest only are down in the low 3’s."

Write to Jason Philyaw.

HSBC Bank USA is considering the possible sale of its US-based mortgage unit, HSBC Mortgage Corp., and notified employees Monday of the possible options being considered although no firm timetable for a potential decision was provided. The bank, the U.S. subsidiary of London-based HSBC Holdings Plc (HBC: 42.59 +0.97%), bases much of its US operations in New York state.

Options for the mortgage subsidiary include "a sale, merger or other business combination," according to a statement from the bank, which also said the mortgage company may look to sell substantially all of its assets. It's also possible that no changes at all will be made, the bank said.

Bank spokesperson Neil Brazil stressed to the press that HSBC is not looking to exit US mortgage originations, but is instead assessing how it conducts its mortgage business in the United States.

"We are still very much in the mortgage origination business. That's not a part of the business that we're looking to exit at all," Brazil told The Buffalo News, a local news service that originally broke the story. "The bank will still be making mortgage loans to our bank customers. This is a review of the process of how we do that."

HSBC's mortgage operations currently employ roughly 1,500 in the US, according to the company, and the company was the 21st largest mortgage originator in the US during 2009.

But Europe's largest bank has been moving to reduce its exposure to unsecured lending and exiting unprofitable businesses for the past two years, tranferring its North American consumer finance operations into a run-off portfolio following heavy losses from subprime lending.

Beyond considering options for its US-based mortgage business, the bank is in the process of divesting from other assets and recently announced that a deal to sell the remainder of its vehicle finance loan portfolio, which totaled $4.3 billion at the end of June, would close in Q310.

HSBC's North American operations posted a pretax profit of $492 million in the first half of 2010, helping the bank increase profits by more than 100% through June of this year.

Paul Jackson is the publisher of HousingWire.com and HousingWire Magazine. Follow him on Twitter: @pjackson

The author holds no relevant investments.