The latest Mortgage Banker Association (MBA) polls shows that the volume mortgage applications rose 6.9 percent for the week, ending April 13, 2012. Unadjusted figures have the index percentage increase at 6.5 percent. The purchase index declined 11.2 percent over the previous week. The mortgage refinance component or mortgage refinance index rose 13.5 percent over the prior week.
Refinance applications were up 75.2 percent of total applications, up from 70.5 percent. Adjustable rate mortgages accounted for 5.3 percent of all applications—a decline from 5.5 the previous week.
The MBA reports an average rate of 4.05% for 30-year fixed rate mortgages, up from 4.1 percent the prior week. Fixed-rate 30-year FHA mortgages rates dropped from an average of 3.87 percent to 3.83 percent. The rates for jumbo mortgages moved from 4.43 percent to 4.36 percent. The 15-year fixed rate average declined from 3.37 percent to 3.33 percent. The 5/1 adjustable rate mortgage (ARM) felled to 2.83 percent from 2.89 percent.
HARP Applications Rise
According to the Mortgage Bankers Association press release, issues regarding the debt problems of certain European Union countries help push mortgage interest rates lower the last week. Jay Brinkmann, the Senior VP and Chief Economist for MBA, states that 32 percent of the mortgage refinance applications involved borrowers refinancing from high interest rate loans to low interest rate mortgages under the Home Affordable Refinance Program (HARP).
Homeowners who have mortgage guaranteed by Fannie Mae or Freddie Mac can contact their mortgage servicers or the Fannie or Freddie websites to determine their eligibility for the HARP program.
The 23 percent decline in applications for home mortgages has a direct correlation with the FHA insurance premium increases that became effective in early April. Many homeowners submitted applications ahead of the premium increase, which caused application to spike. Brinkmann says the drop in the government purchase index registered the largest decline since the expiration of the first-time homebuyers’ tax credit in 2010.
Average Loan Size Up
In February 2012, the average size for a home loan was $225,463. In March, the figure increased to 233,381 in March. Refinance loans averaged $222,048 in February, but dropped to $ 214,593 in March. The Pacific region of the country recorded the largest average size mortgage and refinance loans, with $ 337,227 and $ 290,711, respectively.