December 10, 2009

Mortgage Bankers Association: Weekly Mortgage Survey

Mortgage Bankers Association for the week of 12/09/2009

Market Composite Index: (loan application volume) increased 8.5 percent on a seasonally adjusted basis from one week earlier

Refinance Index: increased 11.1 percent from the previous week and the seasonally adjusted Purchase Index increased 4.0 percent from one week earlier.

Purchase Index: increased 41.7 percent compared with the previous week and was 18.8 percent lower than the same week one year ago. The increase in purchase applications reflected a 10.0 percent increase in Government Purchase applications and a 0.2 percent decrease in Conventional Purchase applications, both on a seasonally adjusted basis.

Refinance Share of Mortgage Activity: increased to 74.4 percent of total applications from 72.1 percent the previous week.

ARM Refinance Activity: decreased to 4.7 percent from 4.8 percent of total applications the previous week.
MBA outlook:
(Excerpted from

In summary the MBAA sees another year of high employment, rising home sales and prices beginning to stabilize. But continued weakness in the job market and excess supply and shadow inventory will slow any recovery in the housing market.

The Federal Reserve will extend their agency MBS purchase program through the end of the first quarter of 2010. However, Fed and Treasury purchases have accounted for the vast majority of all new issuance in this sector in recent months, and rates will increase when the Fed steps out of the market completely.

But, property values will not recover until unsold inventory returns to normal levels. Affordability is at record levels, yet there is no strong indication that the demand recovering. People do not yet seem to trust the recovery and many do not have the necessary down payment or can clear tighter loan qualifications.

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