Mortgage Rates Reach Record Lows in Latest MBA Survey
January 2, 2003
Applications Increase From Previous Week
WASHINGTON, D.C. (January 2, 2003) - The Market Composite Index of mortgage loan applications -- a measure of mortgage loan applications for purchases and refinancings -- for the week ending December 27 increased 4.7 percent to 950.9 on a seasonally-adjusted basis from 908.3 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 Index decreased 36.4 percent but was up 134.0 percent compared to the same week a year earlier.
The MBA seasonally adjusted Purchase Index decreased to 332.4 from 359.4 the previous week. The seasonally adjusted Refinance Index increased to 4548.8 from 4101.0 the previous week. Other seasonally adjusted index activity included the Conventional Index, which increased to 1361.8 from 1297.6 the previous week. The Government Index increased to 265.3 from 258.7 the previous week.
Since the Christmas holiday fell in the middle of the week, the seasonally-adjusted indexes were adjusted upward by 66.7 percent to allow for a two-day holiday effect.
Refinancing activity represented 75.9 percent of total applications, increasing from 72.5 percent the previous week. The share of ARM activity decreased to 11.2 percent from 13.3 percent the previous week.
"Several factors drove interest rates down last week, including a report of weaker-than-expected durable goods orders, soft holiday retail sales, and geopolitical factors in Venezuela, Iraq and North Korea" noted MBA Economist Phil Colling. "There was good economic news with regard to housing, however. New single-family home sales reached record numbers in November."
The average contract interest rate for 30-year fixed rate mortgages decreased to a new record low of 5.69 percent from the previous record low of 5.74 percent the previous week, with points decreasing to 1.53 from 1.56 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 decreased to a new record low of 5.05 percent from the previous record low of 5.14 percent the previous week, with points decreasing slightly to 1.43 from 1.44 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 decreased to a new record low of 3.68 percent from the previous record low of 3.78 percent the previous week, with points increasing to 1.04 from 0.93 the previous week (including the origination fee) for 80 percent LTV loans.
Source: MBA
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