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The FED’s $500 Billion/Year Mortgage Subsidy Has Backfired

Posted on August 22, 2013

WASHINGTON, D.C. (August 21, 2013) — Mortgage applications decreased 4.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 16, 2013.

The Market Composite Index, a measure of mortgage loan application volume, decreased 4.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week. The Refinance Index decreased 8 percent from the previous week. The Refinance Index has dropped 62.1 percent from the recent peak reached during the week of May 3, 2013.

The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index decreased 0.4 percent compared with the previous week and was 5 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 62 percent of total applications from 63 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.68 percent from 4.56 percent, with points increasing to 0.42 from 0.39 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.74 percent from 4.57 percent, with points increasing to 0.28 from 0.25 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.40 percent from 4.25 percent, with points decreasing to 0.21 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.71 percent from 3.60 percent, with points decreasing to 0.32 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

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