Weekly Mortgage Applications Slip

Raw mortgage application volume slipped a seasonally-adjusted 12.6 percent in the week ending Feb. 27, according to data released Wednesday by the Mortgage Bankers Association. The four-week moving average — an indicator of seasonal trends — showed a 4.8 percent drop after remaining unchanged the week before. The MBA, which also studies weekly trends in mortgage interest rates, reported that 30- and 15-year fixed mortgage rates continued to inch upward; 30-year FRMs averaged 5.14 percent, while 15-year FRMS averaged 4.73 percent for the week. The steady increase of mortgage rates up from historic lows went hand-in-hand with decreased confidence in the mortgage application market this week, according to the data. The refinance application index dropped 15.3 percent for the week, bringing refinance as a share of total application activity to 66.9 percent from 69.7 percent the previous week. The four-week moving average for the refi index dropped 5.7 percent from the average recorded last week, suggesting the weak refi trend overall might signal a leveling of the recent popularity boom for all things refinance. The seasonally adjusted purchase index slipped 5.6 percent for the week, while the four-week moving average for the index fell 2.5 percent to its lowest level since April 1998, according to the MBA. The conventional purchase index dropped 6.5 percent and the government purchase index, mostly monitoring FHA activity, slipped 3.9 percent. A separate survey conducted by Mortgage Maxx LLC found that mortgage application activity adjusted for multiple submissions showed overall household activity followed the raw volume trend. Household applications fell 11.9 percent for the week ending Feb. 27, according to the Mortgage Application Index, or MAX. Household activity in California fell 12.4 percent after rising 15.1 percent the week before, according to the MAXcal, which breaks out the state’s data. Taken together with the MBA’s data, the MAX suggests that not only fewer households participated in the application market this week, but those households submitted markedly fewer applications than in previous weeks. The MAX publisher Paul Descloux, in his commentary on the index, offered some consolation  on the decline, saying that household activity has been static overall the last few weeks without last week’s seasonal adjustment for the holiday. But Descloux also warned against undue optimism. “As the fallout from the initial blasts of financial turmoil reach ground, intensifying consumer angst may overtrump any government efforts near-term,” he wrote. “Another leg down in activity might be expected except for the oncoming seasonal upturn in housing sales.” Visit www.mbaa.org and www.mortgagemaxx.us for further details. Write to Diana Golobay at [email protected].