Market Composite Index:(loan application volume)
Mortgage Bankers Association for the week of 01/26/2010
Purchase Index: Refinance Share of Mortgage Activity: Arm Share:
MBA outlook: (Excerpted from mbaa.org)
The financial markets response to the announcement of QE2 on November 3 has likely been a disappointment to the Fed. Equity prices have risen, but long-term rates have backed up considerably, with the yield on the 10-year Treasury pushing up past 3%. And turmoil in Europe has led to an increase in the value of the dollar in exchange markets, not the decline that had been expected in response to QE2. Had the Feds proposal for renewed large-scale asset purchases been well received, Fed officials might now be considering increasing the announced rate of purchases to $100 billion per month or more. But dong so under present circumstances would likely evoke a political firestorm.
The percentage of loans on which foreclosure actions were started during the third quarter was 1.34 percent, up 23 basis points from last quarter and down eight basis points from one year ago. The percentage of loans in the foreclosure process at the end of the third quarter was 4.39 percent, down 18 basis points from the second quarter of 2010 and down eight basis points from one year ago. The seriously delinquent rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 8.70 percent, a decrease of 41 basis points from last quarter, and a decrease of 15 basis points from the third quarter of last year.
We expect that mortgage originations will decrease to $967 billion in 2011, the lowest level of originations since 1997. This is a decline from $1.5 trillion in 2010 and a little under $2.0 trillion in 2009. Purchase originations should increase to $615 billion in 2011 up from $473 billion in 2010. Refinance originations, primarily impacted by the level of mortgage rates, are expected to drop sharply in 2011 to $352 billion and fall further in 2012 to $237 billion. We expect that the refinance share of originations should fall from 69 percent in 2010 to 36 percent in 2011, and then 24 percent in 2012 as rates climb above the 6 percent mark.