By: Ryan Schuette

Low interest rates for mortgage loans drove up mortgage application volume 12.8 percent on a seasonally adjusted basis from the week before.

The mortgage Bankers Association (MBA) reported the latest figures in a weekly survey released Wednesday.

mortgage applications shot up 60.2 percent on an unadjusted basis in contrast with figures from the previous week.

The Refinance Index climbed 15.3 percent from the week before, as the Purchase Index ticked up 8.3 percent on a seasonally adjusted basis, also from the week earlier.

On an unadjusted basis, the Purchase Index hit 47.2 percent in comparison with figures from the week before.

“Coming out of the Thanksgiving holiday, applications increased significantly as mortgage rates dropped to their lowest levels in about two months,” Michael Fratantoni, MBA’s VP of research and economics, said in a statement.

On a seasonally adjusted basis, the four-week moving average for the Market Index fell 3.20 percent, up 3.33 percent for the Purchase Index on the same basis and down 5.13 percent in line with the Refinance Index.

Refinance share of activity in mortgage markets leapt forward to 76 percent of application volume, up from 73.9 percent from the week before.

November this year saw refinance application volume line up at 52.9 percent of applications for 30-year fixed-rate mortgages and 26.2 percent for 15-year loans.

Refinance applications fell to 5.7 percent from 5.8 percent for adjustable-rate mortgages (ARM), the share for which fell from 5.8 percent to crest at 5.7 percent of total applications from the week before.

Applications for home purchase hovered at around 85.5 percent for 30-year mortgages, 6.8 percent for 15-year mortgages, and 5.9 percent for ARMs – the second lowest such for ARM share of purchases since January this year.

Paul Diggle, a property economist with consultancy Capital Economics, tied the “recent strength of mortgage applications” to a decline in mortgage rates to 4.18 percent last week in a note circulated Wednesday.

“High down payment requirements combined with the legacy of previous house price falls are preventing up to half of all existing homeowners from moving home,” he added. “And potential first-time buyers appear less interested in the idea of homeownership at all.”

He urged market watchers not to get “carried away,” forecasting that “mortgage applications for home purchase will post a small gain next year, and further falls cannot be ruled out.”

Rhona Jukes This e-mail address is being protected from spambots. You need JavaScript enabled to view it 661 505-4335

Authors: Rhona Jukes

Read more http://realestatemarbles.com/rjukes/2011/12/08/mortgage-applications-jump-12-8-on-low-rates/