by Calculated Risk on 11/09/2011 07:40:00 AM

From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey

The Refinance Index increased 12.1 percent from the previous week. The seasonally adjusted Purchase Index increased 4.8 percent from one week earlier to the highest level since August 2011.
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"Treasury rates dropped last week, as renewed turmoil in Europe once again led to a flight to quality, and 30-year mortgage rates dropped to their second lowest level of the year," said Mike Fratantoni, MBA's Vice President of Research and Economics. "Refinance applications jumped more than 12 percent to their highest level in a month and some lenders experienced even larger increases. As has been the case all year, many refinance applicants are opting to deleverage by choosing 15-year mortgages."
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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 4.22 percent from 4.31 percent.

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

Click on graph for larger image.

Although the purchase index increased, the index is still sharply below the levels of June and July - and at about the same level as in 1996. This does not include cash buyers, but this suggests weak home sales over the next couple of months.

All current Existing Home Graphs