by Calculated Risk on 6/16/2010 07:11:00 AM

The MBA reports: Mortgage Applications Increase in Latest MBA Weekly Survey

The Refinance Index increased 21.1 percent from the previous week. This is the highest Refinance Index recorded in the survey since May 2009. The seasonally adjusted Purchase Index increased 7.3 percent from one week earlier, which is the first increase in six weeks.
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“Mortgage applications for home purchases increased last week, the first increase in over a month. Refinance applications also picked up significantly over the week,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “While it is clear that purchase applications in May dropped sharply as a result of the tax credit induced increase in applications in April, it is unclear whether we are seeing the beginnings of a rebound now.”
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The average contract interest rate for 30-year fixed-rate mortgages increased to 4.82 percent from 4.81 percent, with points decreasing to 0.89 from 1.02 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

Click on graph for larger image in new window.

This graph shows the MBA Purchase Index and four week moving average since 1990.

The purchase index has collapsed following the expiration of the tax credit suggesting home sales will fall sharply too. This is the lowest level for 4-week average of the purchase index since February 1997.