Refinance Demand Declines as Pool of Qualified Borrowers Shrinks

On an unadjusted basis, Market Composite Index decreased 21.1 percent compared with the previous week. The four week moving average for the seasonally adjusted Market Index is down 0.7 percent. Courtesy of Calculated Risk Blog

Mortgage Bankers Association (MBA) released its Mortgage Applications Survey for the week ending June 4, 2010.

MBA application survey covers over half of all US residential mortgage loan applications taken by mortgage bankers, commercial banks, and thrifts. The data gives economists a look into consumer demand for mortgage loans.

In a low mortgage rate environment, a trend of increasing refinance applications implies consumers are seeking out a lower monthly payment which can increase disposable income and consumer spending (or give consumers a chance to pay down other debts like credit cards).

A falling trend of purchase applications indicates a decline in home buying interest, a negative for the housing industry and the economy as a whole. This is obviously bad news for the landscape industry, which relies heavily on the housing industry.

The Market Composite Index, a measure of mortgage loan application volume, decreased 12.2 percent on a seasonally adjusted basis from one week earlier. This week's results include an adjustment to account for the Memorial Day holiday.

- Courtesy of Mortgage News Daily