|
PURCHASE MORTGAGE APPLICATIONS
|
Statistic |
| MOST
RECENT STATISTIC: |
184.8 |
| GRADE: |
C |
| PERIOD
COVERED: week ending |
01/20/12 |
| Date
Released: |
01/25/12 |
| Next
Release: |
02/01/12 |
| p-Preliminary |
|
Analysis for the Housing Market
By:Ken Lee
In the week ending January 20th, the MBA’s seasonally-adjusted purchase index fell 5.42% from the previous week. The purchase index dropped this past week after reaching its highest levels since the first week of December in the previous week.
The Market Composite Index, which is a measure of mortgage loan application volume, declined 5.0% on a seasonally-adjusted basis from the previous week. Declines of roughly 5% in both refinance and purchase activity helped push overall mortgage application lower this past week.
The refinance share of mortgage activity declined to 81.3% compared to 82.2% last week. The ARM share of mortgage activity declined to 5.3% from 5.6% in the previous week.
** Mortgage application was revised in this week's release. This week’s results are based on an enhanced sample which captures more than 75% of all retail and consumer direct channel mortgage applications, compared to 50% previously. This expansion in survey coverage will benefit all users of the survey as it will increase the representativeness of the data.
Definitions and Importance for the
Housing Market
By:Ken Lee
A purchase mortgage application occurs when a potential purchaser (buyer) submits an application to qualify for a mortgage. Purchase mortgages are tracked separately from refinance mortgages (the issuance of new debt to replace old debt).
Information for mortgage applications is obtained from a survey conducted by the Mortgage Bankers Association, which covers approximately 40 percent of all U.S. retail residential mortgage originations. The survey has been conducted weekly since 1990 and is considered to be highly reliable due to the significant survey sample size. Respondents include mortgage bankers, commercial banks and thrifts. The Mortgage Bankers Association (MBA) uses an index to measure, in constant terms, any fluctuations in the number of mortgage applications issued during a given period. The base period for all indexes is March 16, 1990=100.
Because a mortgage application occurs very early in the home buying cycle, this indicator is a very good predictor of short-term sales. Because it is a weekly survey, and there is little lag time, this indicator is very useful for businesses in the home buying industry. It is important, however, not to overreact to one bad week.
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