Mortgage Bankers Association for the week of 12/15/2010Market Composite Index: (loan application volume) decreased 2.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2.7 percent compared with the previous week.
Refinance Index: decreased 0.7 percent from the previous week. This is the fifth straight weekly decline for the Refinance Index. The seasonally adjusted Purchase Index decreased 5.0 percent from one week earlier.
Purchase Index: decreased 8.6 percent compared with the previous week and was 16.6 percent lower than the same week one year ago
Refinance Share of Mortgage Activity: increased to 76.7 percent of total applications from 75.2 percent the previous week
decreased to 5.5 percent from 5.6 percent of total applications from the previous week.
Arm Share: decreased to 5.6 percent from 5.7 percent of total applications from the previous week.
MBA outlook: (Excerpted from mbaa.org)
Treasury rates increased last week following news that lower tax rates could be extended for another two years, boosting growth prospects. With this move, mortgage rates reached their highest level in more than six months, said Michael Fratantoni, MBAs Vice President of Research and Economics. Not surprisingly, with rates up more than half a percentage point over the past month, refinance activity has declined sharply. Home purchase applications dropped this week following three weeks of increases, but remain near levels last seen in early May.
The percentage of loans on which foreclosure actions were started during the third quarter was 1.34 percent, up 23 basis points from last quarter and down eight basis points from one year ago. The percentage of loans in the foreclosure process at the end of the third quarter was 4.39 percent, down 18 basis points from the second quarter of 2010 and down eight basis points from one year ago. The seriously delinquent rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 8.70 percent, a decrease of 41 basis points from last quarter, and a decrease of 15 basis points from the third quarter of last year.
We expect that mortgage originations will decrease to $1.4 trillion in 2010 from a downwardly revised $2.0 trillion in 2009, previously estimated at $2.1 trillion. Total originations will then fall to $996 billion in 2011, the lowest level of originations since 1997. Purchase activity in 2010 will see a significant drop from 2009, although it was given a brief boost in the spring by the tax credit program, but start to recover in 2011. Refinance activity is currently being buoyed by mortgage rates that remain close to historical lows, but will fall in 2011 and 2012 as rates start to increase. Purchase originations will fall to $480 billion from $665 billion in 2009 and refinance originations will decrease to about $921 billion in 2010 from $1.3 trillion in 2009. We expect that the refinance share of originations should fall from 66 percent in 2010 to 37 percent in 2011, and then 26 percent in 2012.
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