by Calculated Risk on 12/14/2011 08:38:00 AM

From the MBA: Refinance Applications Increase as Rates Drop to 2011 Lows

The Refinance Index increased 9.3 percent from the previous week to its highest level since November 4, 2011. The seasonally adjusted Purchase Index decreased 8.2 percent from one week earlier.
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The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 4.12 percent, the lowest rate this year, from 4.18 percent, with points decreasing to 0.45 from 0.48 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. ...

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500)decreased to 4.47 percent, the lowest rate this year, from 4.52 percent, with points decreasing to 0.45 from 0.47 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. ...

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

Click on graph for larger image.

The purchase index decreased last week, but the 4-week average increased slightly. This index has mostly been sideways for the last 2 years - and at about the same level as in 1997.

The MBA index was one of the indicators that NAR was overestimating existing home sales for the last several years.

All current Existing Home Graphs