The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending March 11, 2011. 

The MBA's loan application survey covers over 50% of all U.S. residential mortgage loan applications taken by mortgage bankers, commercial banks, and thrifts. The data gives economists a snapshot view of consumer demand for mortgage loans. In a falling mortgage rate environment, a trend of increasing refinance applications implies consumers are seeking out lower monthly payments. If consumers are able to reduce their monthly mortgage payment and increase disposable income through refinancing, it can be a positive for the economy as a whole (may boost consumer spending. Also allows debtors to pay down personal liabilities faster). A trend of declining purchase applications implies home buyer demand is shrinking.

Excerpts from the Release...

The Market Composite Index, a measure of mortgage loan application volume, decreased 0.7 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 0.5 percent compared with the previous week. 

The Refinance Index increased 0.9 percent from the previous week and is the highest Refinance Index recorded in the survey since December 2010.  The four week moving average is up 6.6 percent. The refinance share of mortgage activity increased to 66.4 percent of total applications from 65.5 percent the previous week.

The seasonally adjusted Purchase Index decreased 4.0 percent from one week earlier. The unadjusted Purchase Index decreased 3.2 percent compared with the previous week and was 15.5 percent lower than the same week one year ago.  The four week moving average is up 1.6 percent.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.79 percent from 4.93 percent, with points increasing to 1.07 from 0.87 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. This is the lowest contract 30-year rate observed in the survey since the week ending January 14, 2011.  The effective rate also decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.03 percent from 4.17 percent, with points decreasing to 0.85 from 1.15 (including the origination fee) for 80 percent LTV loans. This is the lowest contract 15-year interest rate observed in the survey since the week ending December 3, 2010.  The effective rate also decreased from last week.

Stored borrower demand was released late last week as mortgage rates rallied back to the lows of the year. Lock desk flows were busiest on Friday, March 11th. The thing is, there just wasn't that much pent up energy to be released! Even after adjusting for the previous week's distorted data, the uptick in activity was modest at most. The mortgage market feels very stale.....