Mortgage applications volumes fell in two weekly surveys. The Mortgage Bankers Association (MBA) survey of gross mortgage applications fell 1.2% on a seasonally adjusted basis for the week ending February 5 compared to one week earlier, when applications were rebounding from seasonal lows. The Mortgage Maxx index that’s adjusted to reflect the number of households that applied for mortgages fell 5.5% in the same week. MBA’s refinance index increased 1.4% from the previous week and the seasonally adjusted purchase fell 7% during the same time frame. Refinance mortgages took a 69.7% share of total application volume, up from 69.2% a week ago. Adjustable-rate mortgages took a 4.5% share. “The [application index] lacks animal spirits as the tax credit window remains ajar and the Fed’s [quantitative easing] looks to sunset,” Mortgage Maxx said in its survey. “After a year the Fed’s [quantitative easing] tonic distressingly yields ever diminishing returns.” The firm has said the homebuyer tax credit may pull some activity forward in February, but it remains to be seen what will happen when the tax credit expires and the Federal Reserve ends its mortgage-backed securities (MBS) purchase program. Mortgage Maxx added: “[C]an the organic securities market fill the anticipated QE void come April just as tax incentives dissipate? If an air pocket in financing does propel mortgage rates significantly higher, 2010 activity may remain extremely fragile and the [application index] grounded.” As HousingWire previously reported, some believe the homebuyer tax credit could get extended if housing stalls this summer. Write to Diana Golobay.

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