by Calculated Risk on 10/05/2011 07:17:00 AM

The MBA reports: Mortgage Applications, except Government Refinances, Decrease in Latest MBA Weekly Survey

Refinance Index decreased 5.2 percent from the previous week. The seasonally adjusted Purchase Index decreased 0.8 percent from one week earlier.
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"Interest rates continued to fall last week, driven by the latest Federal Reserve actions to invest in longer-term Treasury and mortgage securities, but potential borrowers largely remained on the sidelines, seemingly unimpressed by the lowest (by any measure) mortgage rates since the 1940s," said Mike Fratantoni, MBA's Vice President of Research and Economics. "Refinance application volume declined and purchase volume was little changed. ... Many refinance borrowers are opting to deleverage by moving to a 15-year term, with this product accounting for 27.0 percent of refinance volume last week."
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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 4.18 percent from 4.24 percent ... The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.49 percent from 4.53 percent

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

Click on graph for larger image in graph gallery.

The purchase index declined in August - although this doesn't include the large number of cash buyers - this suggests fairly weak home sales this fall.