This morning the Mortgage Bankers Association released their Weekly Mortgage Applications Survey for last week. Total mortgage application activity declined 5.5 percent on a seasonally adjusted basis from the week prior. The refinance index fell 7.7 percent from the week prior, while the seasonally adjusted purchase index fell 1.4 percent. Michael Fratantoni, the Vice President of Research and Economics for the MBA commented:
“Mortgage rates increased last week as many incoming economic indicators continue to show stronger growth than had been anticipated. Refinance volume continues to be low, as fewer homeowners with equity have any incentive to refinance. We are at the beginning of the spring buying season, but purchase volume remains weak on a seasonally adjusted basis.”
Mortgage rates have increased steadily since they hit their all-time low point last fall. According to Freddie Mac, the average rate on a 30-year fixed rate mortgage was as low as 4.17 percent in October. As of last week, the average rate on a 30-year fixed mortgage was up to 4.81 percent.
The MBA predicts that total mortgage volume will plummet in 2011, declining to a total of $966 billion, down from $1.505 trillion in 2010, and $1.995 trillion in 2009. Further, total refinance volume is predicted to decline from $1.032 trillion in 2010 to $352 billion in 2011.
Barring a turnaround in the employment rate or a steep decline in mortgage rates, 2011 could be a lean year for those in the mortgage industry.
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