Mortgage Bankers Association for the week of 2/24/2010Market Composite Index: (loan application volume) decreased 8.5 percent on a seasonally adjusted basis from one week earlier
Refinance Index: decreased 8.9 percent from the previous week. The seasonally adjusted Purchase Index decreased 7.3 percent from one week earlier, putting the index at its lowest level since May 1997.
Purchase Index: decreased 3.6 percent compared with the previous week and was 13.4 percent lower than the same week one year ago.
Refinance Share of Mortgage Activity: decreased to 68.1 percent of total applications from 69.3 percent the previous week.
Arm Share: increased to 4.7 percent from 4.4 percent of total applications from the previous week.
MBA outlook: (Excerpted from mbaa.org)
The economy is growing again. 4Q growth of 2009 exceeded expectations due to strong growth in business inventories. However inventory replacement is a short lived spurt, unless consumers buy. Weakness in the job market and a fragile recovery are likely to keep consumers from spending on big ticket items like houses and cars.
Existing home sales fell back in December and new home builders are not upbeat. The Fed remains unlikely to raise rates, however, they are going to end their MBS purchase program. This will certainly cause a rise in interest rates as the marketplace demands higher rates to compensate for risk.