![](https://biggerpockets.s3.amazonaws.com/assets/member-blog-image.jpg)
![](https://biggerpockets.s3.amazonaws.com/assets/logo@3x.png)
Mortgage Bankers Weekly Update: Purchase Applications Plummet
![](http://3.bp.blogspot.com/_N17Ne7uVoXU/SuoG7y-DdyI/AAAAAAAAA3c/qW6rJU4lLcc/s320/mort+loan+apps+1014.gif)
Mortgage Bankers Association for the week of 5/19/2010
Market Composite Index: (loan application volume) decreased 1.5 percent on a seasonally adjusted basis from one week earlier.Refinance Index: increased 14.5 percent from the previous week and the seasonally adjusted Purchase Index decreased 27.1 percent from one week earlier. This is the lowest Purchase Index observed in the survey since May of 1997
Purchase Index: decreased 27.0 percent compared with the previous week and was 24.1 percent lower than the same week one year ago.
Refinance Share of Mortgage Activity: increased to 68.1 percent of total applications from 57.7 percent the previous week
Arm Share: remained constant at 6.3 percent of total applications from the previous week.
MBA outlook: (Excerpted from mbaa.org)
![Background Color](http://yourpropertypath.com/artman2/artman2/wysiwyg/scripts/moz/icons/btnBackColor.gif)
Purchase applications plummeted 27% last week and have declined almost 20% over the past month, despite relatively low interest rates. The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season. In fact, this drop occurred even as rates on 30 year fixed rate mortgages continued to fall, and at 4.83% are at their lowest level since November 2009, said Michael Fratantoni, MBA VP of Research and Economics. However, refinance borrowers did react to these lower rates, with refi applications up almost 15%, hitting their highest level in nine weeks
Projections
We predict that mortgage originations will fall to $1.37 trillion in 2010 from an estimated $2.1 trillion in 2009, a 35% decline. Purchase originations will decline very slightly by around 3% to $717 billion, as home prices stabilize, and home sales increase. Refinance originations will fall by about 52% to $656 billion in 2010 as mortgage rates are expected to rise through the year. Refinance volumes in the first half of the year are likely to be somewhat higher than anticipated in prior forecasts as rates decreased sharply in recent weeks due to the crisis in Europe. We have adjusted our refinance forecast upwards in response.
Related Articles
Expect Mortgage Rates To Rise
How To Spot A predatory lender
Home Trends: Price Stability
Comments (1)
Until the Realtors who are a major road block to the recovery of the economy are disbanded - highway robbery of home owners will continue!
Dale Osborn, about 14 years ago