Composite and Refinance Indexes Reach Record Highs in Latest MBA Survey

March 19, 2003

Mortgage Rates Increase from Record Lows

Washington, D.C. (March 19, 2003) - The Market Composite Index of mortgage loan applications - a measure of mortgage loan applications for purchases and refinancings - for the week ending March 14 increased to a record high of 1673.4 on a seasonally-adjusted basis from the previous record of 1603.1 one week earlier, according to the Weekly Mortgage Applications Survey of the Mortgage Bankers Association of America (MBA), which was released today. On an unadjusted basis, the Index increased by 4.4 percent and was up 254.8 percent compared to the same week a year earlier.

The MBA seasonally adjusted Purchase Index increased slightly to 347.3 from 345.0 the previous week. The seasonally adjusted Refinance Index increased to a record high of 9387.0 from the previous record high of 8920.9 one week earlier. Other seasonally adjusted index activity included the Conventional Index, which increased to 2476.0 from 2376.7 the previous week. The Government Index increased to 334.0 from 312.0 the previous week.

Refinancing activity represented 80.5 percent of total applications, increasing from 79.8 percent the previous week. The refinance share of 80.5 was a record high, breaking the record set the previous week. The share of ARM activity increased to 12.8 percent from 11.4 percent the previous week.

"The stock market rallied late last week and interest rates also went up from record low levels," said MBA Senior Economist Phil Colling. "When homeowners perceive that interest rates have bottomed out, they often rush out to refinance. That's reflected in last week's record high refinance index."

The average contract interest rate for 30-year fixed rate mortgages increased to 5.61 from the record low of 5.42 percent one week earlier, with points decreasing to 1.48 from 1.55 the previous week (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed rate mortgages increased to 4.88 percent from the record low of 4.72 percent one week earlier, with points increasing to 1.58 from 1.54 the previous week (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 1-year ARMs increased to 3.47 from the record low of 3.29 percent one week earlier, with points increasing to 1.04 from 0.91 the previous week (including the origination fee) for 80 percent LTV loans.

Source: Mortgage Bankers Association


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