It’s Wednesday, and you know what that means: MBA Weekly Mortgage Application Survey Day! Let’s take a look, shall we?
Total Mortgage applications decreased 9.5 percent (seasonally adjusted) from the week prior. Refinance activty fell off 11.4 percent from the week before, while purchase applications fell 5.9 percent from the week prior. Refinance activity is now at its lowest point since July, 2009. Michael Fratantoni, VP of Research and Economics for the MBA commented:
“Mortgage rates remained above 5 percent last week, up almost a full percentage point from their October lows, and refinance volume continues to drop. Applications for home purchases also declined on a seasonally adjusted basis. Buyers have not returned to the market as rising rates have reduced affordability, to some extent.”
The four week moving average for purchases is down 1.9 percent, while the four week moving average is down 6.2 percent. Refi activity now constitutes 64 percent of all mortgage activity, down from 66 percent last week.
The MBA predicted that total mortgage volume would fall to $966 billion in 2011, down from $1.505 trillion in 2010, and $1.995 trillion in 2009. They also predicted that refinance volume would collapse, falling from $1.032 trillion in 2010 to $352 billion in 2011. Unfortunately, it looks as though these predictions are coming to fruition. That demand for houses remains incredibly weak, and appears to be getting weaker almost guarantees that home values will continue to decline for the foreseeable future.
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