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Mortgage Loan Applications Down In Latest MBA Survey

March 20, 2002

Refinance Index Decreases From Previous Week

WASHINGTON, D.C.The market composite index of mortgage loan applications-a measure of loan purchases and refinances-for the week ending March 15 decreased 11.0 percent to 471.6 on a seasonally adjusted basis from 530.0 the previous week, according to the Weekly Mortgage Applications Survey of the Mortgage Bankers Association of America (MBA), which was released today. On an unadjusted basis, the application index decreased 10.6 percent and was down 14.3 percent compared to the same week a year earlier.

The MBA seasonally adjusted Purchase Index decreased to 310.9 from 314.6 the previous week. The seasonally adjusted Refinance Index decreased to 1406.3 from 1783.0 the previous week. Other seasonally adjusted index activity included the Conventional Index, which decreased to 624.1 from 709.0 the previous week, and the Government Index, which decreased to 217.1 from 231.2 the previous week.

Refinancing activity represented 40.8 percent of total applications, decreasing from 46.3 percent the previous week. The share of ARM activity increased to 16.2 percent from 14.1 percent the previous week.

The refinance index, at 1406.3, is the lowest since the week ended July 13, 2001 (with the exception of the holiday week ended December 28, 2001). The percent of the number of refinance applications, at 40.8, is the lowest since the week ended July 6, 2001. Phil Colling, an Economist with the Mortgage Bankers Association of America, stated "When the 30-year fixed contract rate is below 7.00 percent, refinance activity increases substantially. When the 30-year rate is above about 7.30 percent, refinance activity tends to be relatively low. Last week, the average 30-year rate was 7.11 percent, which is within the ?gray zone? between 7.00 and 7.30 percent. While the refinance numbers were down last week, they are still quite high by historical standards. The refinance boom that started in early 2001 is still occurring, but mortgage interest rates will determine the duration and intensity of that boom."

The average contract interest rate for30-year fixed rate mortgages was 7.11 percent, increasing from 7.08 percent the previous week, with points increasing to 1.38 from 1.29 the previous week (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for15-year fixed rate mortgages was 6.59 percent, increasing slightly from 6.57 percent the previous week, with points increasing to 1.42 from 1.28 the previous week (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for1-year ARMs was 5.26 percent, increasing from 5.17 percent the previous week, with points increasing to 1.11 from 1.05 the previous week (including the origination fee) for 80 percent LTV loans.

Copyright: Mortgage Bankers Association



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