Mortgage Bankers Weekly Update : Mortgage Applications Decrease
Market Composite Index: (loan application volume) increased 14.6 percent on a seasonally adjusted basis from one week earlier.
Refinance Index: increased 17.2 percent from the previous week and the seasonally adjusted Purchase Index increased 9.0 percent from one week earlier. The unadjusted Purchase Index increased 11.7 percent compared with the previous week and was 9.8 percent lower than the same week one year ago.
Purchase Index: increased to 69.1 percent of total applications from 68.1 percent the previous week.
Refinance Share of Mortgage Activity: increased to 69.1 percent of total applications from 68.1 percent the previous week.
Arm Share: increased to 4.8 percent from 4.7 percent of total applications from the previous week.
MBA outlook: (Excerpted from mbaa.org)
The economy is growing again. 4Q growth of 2009 exceeded expectations due to strong growth in business inventories. However inventory replacement is a short lived spurt, unless consumers buy. Weakness in the job market and a fragile recovery are likely to keep consumers from spending on big ticket items like houses and cars.
Existing home sales fell back in December and new home builders are not upbeat. The Fed remains unlikely to raise rates, however, they are going to end their MBS purchase program. This will certainly cause a rise in interest rates as the marketplace demands higher rates to compensate for risk.
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