![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjfcEHPKqLb64HlxBtFsTNxK9IzWUoGPiUlZvjrte2SwCWw-2ovazugDW_b8C7v0AK4ZKE5-zrOdUhMBkGef6YfbYkws53ZXrDqDLqFksHodtGcXh43YNjSEixLXSwVeno4fIyv6A/s400/moneyhouse.jpg)
The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.
The latest data is showing that the average rate for a 30 year fixed rate mortgage decreased 8 basis points since last week to 5.99% while the purchase application volume increased 3.2% and the refinance application volume increased 0.9% compared to last week’s results.
It’s important to note that, in the wake of the conservatorship of Fannie Mae and Freddie Mac, the average interest rate on an 80% LTV 30 year fixed rate loan initially dropped significantly but has since climbed to the lower end of the range seen throughout 2007.
NOTE: With this release the MBAA significantly revised its estimate of the interest rate for an 80% LTV 1 year ARM loan running back to June 2008.
I have emailed the MBAA for more details and to request the revisions and will report further information hopefully next week.
Also note that all application volume values reflect only “initial” applications NOT approved applications… i.e. originations… actual originations would likely be notably lower than the applications.
The following chart shows how the principle and interest cost and estimated annual income required to cover the PITI (using the 29% “rule of thumb”) on a $400,000 loan has changed since November 2006.
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2kR8MOhoQDNL0Y0XXh-1QH70fb8shudbcF1YFSlJAOGc7URPOKsDJ7Rzp3APntoPpZScJoqTcUaDCONtMpdObGekVuze_v9IKhsBSJZz7qmSqrOU0ORR5a19ypmJeolg6fw8aTA/s400/mba100808income.jpg)
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhU6Weg5nBKzVm2BNICCilSqOR-UHVLMQmjlxim7BX067rnkLBTQ_gxu9GB-ceNrou5_d-gcJP2Ae3E1kVz6nfsda3roUVWCM11iU9h_ZOOHu3dXxsSqoZjRe_agF15a9W2AbUirA/s400/mba100808rates.jpg)
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhA6i9JXjpW2rmKLSL2pIVpGHMQm4WOM9JyoePOhmd2KPsQCoA6msYAacO5kE6vr41CLIFn7i6n9AkO-gBbjOZ1ii0XK2ZVGLMCIR3QVJYb0NgBCuTKBG7I64oruhzoLOTJoWawuw/s400/mba100808allrates.jpg)
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhtv782WjHocOH0zQUpIqECcrh8lk4xiM82V8_tasVLL5KDDtnUcjKe6GaWQq5ElOAACsOhPItVTZeWL3YY8uoIyQ9I1blQoSI9XGj2fXdMkNm1HwZ84wR6wUGtJ7SIPNvGqRornA/s400/mba100808pi.jpg)
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjTZu6wWbmR4G-mCN8EkzpbK23N6bME8UG-yYVLgzUsero9AIiG_UkWtm4LHkBw0EBkvnMDEUPTcr7rlkX1seRTFaD8RptFdLCA45Z-79LAYvb6r6a9MqxO4y4dHdZSoWumuYri1Q/s400/mba100808ri.jpg)
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjancq1e964XL6NIj2RYsbRT_IMfS2hoD_atg5iwkxFk39Q6JoXNNV4ZOEQox_xGxVCGcX8ZazVdq-xIR1ybZh4-WMInBmDMVQTqnZvNVbDFWJ_dJT-MIptUCmwG8-u6gfJr5KRnA/s400/mba100808ci.jpg)