Mortgage Applications Tumble as Rates Rise, Refis Disappear
Mortgage refinancing applications disappeared last week as rates appeared to rise, driving a widely-watched measure of application activity strongly downward last week. The Mortgage Bankers Association's composite index of all mortgage loan application activity fell to 637.6 for the week ended April 18, a drop of 14.2 percent on a seasonally-adjusted basis from one week earlier. The application index is calibrated to March 16, 1990; a reading of 637.6 means that application activity was roughly 6.4 times greater than when the index was first established. Refinancing applications tumbled 20.2 percent as rates on 30-year fixed rate mortgages increased 30 basis points to 6.04 percent, the MBA said; purchase applications fell 6.4 percent. Even FHA applications -- which have largely been increasing as policymakers have focused on reviving the Depression-era agency -- fell 2.7 percent, according to MBA data. Refinance share of applications, not surprisingly, dropped below half of all applications last week, while ARM share increased to 6.6 percent. ARM applications were once nearly 30 percent of all applications during the peak of the housing boom in 2005 and into 2006. For more information, visit http://www.mortgagebankers.org.