Mortgage Applications Decline 35% in 4 Weeks

From the Mortgage Banker’s Association:

The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending June 4, 2010.  The Market Composite Index, a measure of mortgage loan application volume, decreased 12.2 percent on a seasonally adjusted basis from one week earlier. This week’s results include an adjustment to account for the Memorial Day holiday.  On an unadjusted basis, the Index decreased 21.1 percent compared with the previous week.The Refinance Index decreased 14.3 percent from the previous week and the seasonally adjusted Purchase Index decreased 5.7 percent from one week earlier. The unadjusted Purchase Index decreased 16.3 percent compared with the previous week and was 30.4 percent lower than Memorial Day week last year.

The four week moving average for the seasonally adjusted Market Index is down 0.7 percent.  The four week moving average is down 11.7 percent for the seasonally adjusted Purchase Index, while this average is up 3.6 percent for the Refinance Index.

“Purchase and refinance applications dropped this week, even after an adjustment for the Memorial Day holiday.  Purchase applications are now 35 percent below their level of four weeks ago, as homebuyers have not yet returned to the market following the expiration of the homebuyer tax credit at the end of April,” said Michael Fratantoni, MBA’s Vice President of Research and Economics.  “Although rates remained essentially flat, refinance applications dropped this past week for the first time in a month.  Despite the historically low rates, many homeowners have already refinanced recently, remain underwater on their mortgages, have uncertain job situations, or have damaged credit following this downturn, and therefore may not qualify to refinance.”