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Refinance Applications Fall to Lowest Level in Over a Month in Latest MBA Weekly


By Ironman   Follow   Wed, 19 Dec 2012, 11:10pm PST   865 views   9 comments   Watch (0)   Share   Quote   Permalink   Like   Dislike (3)  

http://www.mbaa.org/NewsandMedia/PressCenter/82977.htm

WASHINGTON, D.C. (December 19, 2012) — Mortgage applications decreased 12.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 14, 2012.

The Market Composite Index, a measure of mortgage loan application volume, decreased 12.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 13 percent compared with the previous week. The Refinance Index decreased 14 percent from the previous week to the lowest level since week ending November 2, 2012. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index decreased 8 percent compared with the previous week and was 9 percent higher than the same week one year ago.

“Despite the Federal Reserve’s announcement last week that it would purchase an additional $45 billion in Treasury securities per month as part of its continuing quantitative easing effort, rates increased in the second half of the week,” said Mike Fratantoni, MBA’s Vice President of Research and Economics. “As a result, refinance applications dropped sharply to the lowest level in over a month.”

The refinance share of mortgage activity decreased to 83 percent of total applications from 84 percent the previous week. The HARP share of refinance applications fell to 25 percent. The adjustable-rate mortgage (ARM) share of activity increased to 3 percent of total applications.

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Mr Happygoluckofus   befriend   ignore   Wed, 19 Dec 2012, 11:48pm PST   Share   Quote   Like (1)   Dislike (2)     Comment 1

There is no point in refinancing.

The only people that benefit, are mortgages on big loans at least 500K or greater, and are currently financed at 5% or greater. Which to be honest, most of those folks that would fit that description, have already refinanced.
Everyone else would need more than 20% down just to cover the equity difference from when they bought. So most all in this group would be financing at 3.5% down or smaller. Which ugly hidden fees, and a perpetually rising MIP premiums makes even refinancing a 4.75% loan to 2% a 0 sum game.

Go though all of the hassle to close a refi just to end up paying the same if not more. What would be the point of that?

Ironman   befriend   ignore   Thu, 20 Dec 2012, 12:04am PST   Share   Quote   Like (2)   Dislike (4)     Comment 2

CaptainShuddup says

Which to be honest, most of those folks that would fit that description, have already refinanced.

That's what I think too, since rates have been low for quite a while, those who could refinance, already have.

Also, I wonder how many of these applications actually get approved. How many come back month after month and re-apply but don't have the credit scores to be approved or have the equity required?

The other piece of the report is that 83% of applications were for refi's which mean only 17% for purchases. Doesn't seem like there is a lot of purchase activity.

Goran_K   befriend   ignore   Thu, 20 Dec 2012, 12:23am PST   Share   Quote   Like (1)   Dislike (1)     Comment 3

Call it Crazy says

The other piece of the report is that 83% of applications were for refi's which mean only 17% for purchases. Doesn't seem like there is a lot of purchase activity.

The Mortgage Purchase Index has crept down to 1994 levels, basically, nearly a 20 year low.

But I'm sure investors will keep demand high. They have lots of cash to keep it going according to e-man.

Ironman   befriend   ignore   Thu, 20 Dec 2012, 12:55am PST   Share   Quote   Like   Dislike (3)     Comment 4

E-man says

To put things in context, if 3.5M loans represent 17% of the purchases, that means there's about 20M refinance going on per year. That's a lot of refinancing activity.

How do we find out actually how many refi applications are approved? How many get funded versus how many get denied?

Ironman   befriend   ignore   Thu, 20 Dec 2012, 1:25am PST   Share   Quote   Like   Dislike (3)     Comment 5

E-man says

If we have one death this year and 3 death next year, it doesn't sound like much, but the media would say the death rate has increased 200% year over year. They are correct, but they know how to report it to grab people's attention. That's all.

That's exactly why I hate things being reported in percentages. The percentage numbers a meaningless until applied to actual numbers. But reporting the percentages sure makes the story sound better...

Zakrajshek   befriend   ignore   Sun, 23 Dec 2012, 4:04am PST   Share   Quote   Like   Dislike     Comment 6

The entire system is designed to masters to keep the masses at work for them all the time. Mortgages are just another motivator to that end. Only then can the rich masters skim their living off the workers backs. Little vacation, later retirement, no health insurance, lower pay, etc are the goals of the masters so they can skim ever more and more for themselves.

Zakrajshek   befriend   ignore   Sun, 23 Dec 2012, 4:07am PST   Share   Quote   Like   Dislike     Comment 7

The first line on the above comment is: The entire system is designed by the masters to keep...

tatupu70   befriend   ignore   Sun, 23 Dec 2012, 4:11am PST   Share   Quote   Like   Dislike     Comment 8

Zakrajshek says

The entire system is designed to masters to keep the masses at work for them all the time. Mortgages are just another motivator to that end. Only then can the rich masters skim their living off the workers backs. Little vacation, later retirement, no health insurance, lower pay, etc are the goals of the masters so they can skim ever more and more for themselves.

It's actually the exact oppposite of the above. When people have the opportunity to buy, it is greater freedom than when they were servants to their landlord. They can choose to rent or choose to buy. 30 year mortgages were a great invention.

The rest of your post about rich masters, little vacation, etc. has nothing to do with mortgages. It has everything to do with the wealth disparity and poor economy without enough jobs...

mell   befriend   ignore   Sun, 23 Dec 2012, 4:29am PST   Share   Quote   Like   Dislike     Comment 9

tatupu70 says

When people have the opportunity to buy, it is greater freedom than when they were servants to their landlord.

We only see our landlord when we want him to fix something or when he is in the hood and stops by for a friendly chat. My banks are not that nice though they stash quite a bit of my money.

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