Refinancing Drives Increase In Mortgage Applications In Latest MBA Weekly Survey
|January 23, 2008|
The Mortgage Bankers Association said its seasonally adjusted index of refinancing applications surged by 16.9 percent in the week ending Jan. 18, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 981.5, an increase of 8.3 percent on a seasonally adjusted basis from 906.4 one week earlier. On an unadjusted basis, the Index increased 11.0 percent compared with the previous week and was up 63.7 percent compared with the same week one year earlier.
“Refinance applications are up 92% since the beginning of November and purchase applications are up 7%. With tighter credit conditions we do not know how many of these applications will become loans, but it is clear that borrowers are responding to the 40-80 basis point drop in rates we have seen since November 2 across products," said Jay Brinkmann, Vice President of Research and Economics at the Mortgage Bankers Association.
The Refinance Index increased 16.9 percent to 4178.2 from 3575.5 the previous week and the seasonally adjusted Purchase Index decreased 4.6 percent to 439.9 from 461.2 one week earlier. The Conventional Purchase Index decreased 5.5 percent while the Government Purchase Index (largely FHA) increased 1.0 percent. On an unadjusted basis, the Purchase Index increased 1.1 percent to 369.7 from 365.7 the previous week. The seasonally adjusted Conventional Index increased 8.3 percent to 1413.7 from 1305.5 the previous week, and the seasonally adjusted Government Index increased 8.2 percent to 260.9 from 241.2 the previous week. The four week moving average for the seasonally adjusted Market Index is up 13.7 percent to 782.0 from 687.5. The four week moving average is up 2.8 percent to 419.0 from 407.6 for the Purchase Index, while this average is up 23.6 percent to 2967.2 from 2401.5 for the Refinance Index.
The refinance share of mortgage activity increased to 66.0 percent of total applications from 62.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 9.3 from 9.2 percent of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.49 percent from 5.62 percent, with points increasing to 1.07 from 0.94 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.96 percent from 5.07 percent, with points increasing to 1.22 from 1.09 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for one-year ARMs decreased to 5.51 percent from 5.77 percent, with points increasing to 1.01 from 1.00 (including the origination fee) for 80 percent LTV loans.