US mortgage applications fell 2.7% last week despite Federal Reserve interest rate cut

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US mortgage applications fell 2.7% last week despite Federal Reserve interest rate cut
By Finfacts Team
Oct 3, 2007, 16:00

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The US Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending September 28, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 636.7, a decrease of 2.7 percent on a seasonally adjusted basis from 654.2 one week earlier. On an unadjusted basis, the Index decreased 2.9 percent compared with the previous week and was up 0.4 percent compared with the same week one year earlier.

On September 18, 2007, the Federal reserve cuts the Federal funds rate from 5.25 percent to 4.75 percent.

The Refinance Index decreased 3.8 percent to 1950.4 from 2026.5 the previous week and the seasonally adjusted Purchase Index decreased 1.8 percent to 411.4 from 418.8 one week earlier. On an unadjusted basis, the Purchase Index decreased 2.2 percent to 393.3 from 402.3 the previous week. The seasonally adjusted Conventional Index decreased 3.5 percent to 904.2 from 937.2 the previous week, and the seasonally adjusted Government Index increased 4.6 percent to 190.6 from 182.3 the previous week.

The four week moving average for the seasonally adjusted Market Index is up 0.5 percent to 655.4 from 651.9. The four week moving average is down 0.8 percent to 432.6 from 436.2 for the Purchase Index, while this average is up 2.4 percent to 1953.9 from 1908.8 for the Refinance Index.

The refinance share of mortgage activity decreased to 46.0 percent of total applications from 46.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 13.8 from 12.2 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 6.32 percent from 6.38 percent, with points decreasing to 1.08 from 1.15 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.95 from 6.06 percent, with points decreasing to 1.07 from 1.12 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year ARMs increased to 6.21 from 6.09 percent, with points decreasing to 0.89 from 0.93 (including the origination fee) for 80 percent LTV loans.