Fixed Mortgage Rates Decline in Latest MBA Survey

November 14, 2002

Refinancing Activity Remains Strong

WASHINGTON, D.C. (November 13, 2002) The Market Composite Index of mortgage loan applications -- a measure of mortgage loan applications for purchases and refinancings -- for the week ending November 8 decreased 3.7 percent to 992.3 on a seasonally-adjusted basis from 1030.5 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 4.3 percent and was down 6.4 percent compared to the same week a year earlier.

The MBA seasonally adjusted Purchase Index decreased to 333.3 from 369.5 the previous week. The seasonally adjusted Refinance Index decreased to 4825.6 from 4875.1 the previous week. Last week marked the sixteenth consecutive week that the Refinance Index has been above 4000, and the Refinance Index was above 5000 for eleven of those sixteen weeks. Other seasonally adjusted index activity included the Conventional Index, which decreased to 1428.0 from 1471.3 the previous week. The Government Index decreased to 265.4 from 294.7 the previous week.

Refinancing activity represented 73.0 percent of total applications, increasing from 70.6 percent the previous week. The share of ARM activity decreased slightly to 13.3 percent from 13.4 percent the previous week.

The average contract interest rate for 30-year fixed rate mortgages decreased to 5.74 percent from 6.03 percent the previous week, with points increasing to 1.52 from 1.40 the previous week (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The 30-year fixed mortgage rate established a new record low, breaking the previous record of 5.84 percent the week ended September 27, 2002

The average contract interest rate for 15-year fixed rate mortgages decreased to 5.17 percent from 5.35 percent the previous week, with points decreasing to 1.42 from 1.44 the previous week (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The 15-year fixed rate was just shy of its record low of 5.16 percent the week ended October 4, 2002.

The average contract interest rate for 1-year ARMs was 3.87 percent, decreasing from 3.90 percent the previous week, with points decreasing slightly to 1.12 from 1.13 the previous week (including the origination fee) for 80 percent LTV loans.

Source: Mortgage Bankers Association