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ARM Applications Down in Latest Survey

January 4, 2006

WASHINGTON, D.C. - The Mortgage Bankers Association (MBA) Weekly Mortgage Applications Survey for the week ending December 30 found that the Market Composite Index - a measure of mortgage loan application volume was 545.9 -- a decrease of 1.5 percent on a seasonally adjusted basis from 554.1 one week earlier. A holiday adjustment was included in the seasonally adjusted numbers to help account for the reduced application activity during the holiday week. On an unadjusted basis, the Index decreased 20.8 percent compared with the previous week and was down 9.9 percent compared with the same week one year earlier.

The seasonally-adjusted Purchase Index decreased by 3.4 percent to 418.3 from 432.9 the previous week whereas the Refinance Index increased by 8.3 percent to 1363.2 from 1259.1 one week earlier. Other seasonally adjusted index activity includes the Conventional Index, which decreased 1.6 percent to 812.0 from 824.9 the previous week, and the Government Index, which decreased 0.3 percent to 101.9 from 102.2 the previous week.

The four week moving average for the seasonally-adjusted Market Index is down 4.2 percent to 580.5 from 606.2. The four week moving average is down 3.3 percent to 449.2 from 464.8 for the Purchase Index while this average is down 5.9 percent to 1344.5 from 1428.9 for the Refinance Index.

The refinance share of mortgage activity increased to 42.7 percent of total applications from 40.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 28.8 percent of total applications from 32.5 percent the previous week.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 6.15 percent from 6.21 percent on week earlier, with points increasing to 1.32 from 1.18 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.74 percent from 5.76 percent, with points increasing to 1.25 from 1.20 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year ARMs increased to 5.41 percent from 5.36 percent one week earlier, with points decreasing to 0.92 from 0.98 (including the origination fee) for 80 percent LTV loans.

Source: MBA



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