Mortgage Applications Rise, But No Rebound Yet Seen
Data released this week by the Mortgage Bankers Association and the Mortgage Maxx LLC data both showed that mortgage applications rose the week ending Oct. 24, as steady interest rates and a passing financial panic led some would-be homebuyers to test the water. The MBA's Market Composite Index reached 476.7, up 16.8 percent on a seasonally-adjusted basis from the previous week. The index indicates a mortgage application volume slightly more than 4.75 times that recorded in 1990; applications remain well below-year ago levels, however, with last week's volume 30 percent below the index value recorded during the same week in 2007. The MBA data showed an increase in refinances, conventional purchases and government purchases alike; Average contract rates for 30- and 15-year fixed-rate mortgages and average contract rates for one-year ARMs continued to decrease slightly, as well. The MAX Mortgage Application Index also showed a rise in application volume, though not as large as that reported by the MBA. The index, often used by prepayment researchers looking to correct for "application shopping," saw a 7.1 percent rise for the week ending Oct. 24 over the previous week. "After imploding 28 percent in four weeks, the MAX bounces modestly yet remains below a seasonally uncharacteristic 100," published Paul Descloux commented in the weekly MAX report. He attributed "credit withering" as a factor that has likely influenced the ongoing application slump. Descloux also warned against making any assumptions that consumer confidence has returned during what he called "annus horribilis," or horrible year -- well-timed, given that consumer confidence hit its lowest level on record during October, according to press reports Tuesday. "With just four complete weeks left until the holiday effect begins, and mortgage rates still way above any refi trigger point, the MAX will grind to fifty or lower by year end," the report read. "Apocalyptic headlines emanating from both investors and the government the past few weeks may yield new surprise lows in seasonal activity." For more information, visit http://www.mortgagebankers.org and http://www.mortgagemaxx.us. Write to Diana Golobay at firstname.lastname@example.org.