Composite and Refinance Indexes Reach Record Highs in Latest MBA Survey
March 12, 2003
Mortgage Rates Reach New Low
Washington, D.C. (March 12, 2003) - The Market Composite Index of mortgage loan applications - a measure of mortgage loan applications for purchases and refinancings - for the week ending March 7 increased to a record high of 1603.1 on a seasonally-adjusted basis from 1265.4 the previous week, according to the Weekly Mortgage Applications Survey of the Mortgage Bankers Association of America (MBA), which was released today. The previous record for the Market Composite index of 1317.0 occurred the week ended October 4, 2002. On an unadjusted basis, the Index increased by 26.2 percent and was up 190.1 percent compared to the same week a year earlier.
The MBA seasonally adjusted Purchase Index decreased slightly to 345.0 from 345.9 the previous week. The seasonally adjusted Refinance Index increased to a record high of 8920.9 from 6614.0 the previous week. The previous record of 6926.9 was reached the week ending October 4, 2002. Other seasonally adjusted index activity included the Conventional Index, which increased to 2376.7 from 1842.1 the previous week. The Government Index increased to 312.0 from 303.1 the previous week.
Refinancing activity represented 79.8 percent of total applications, increasing from 74.7 percent the previous week. The refinance share of 79.8 was a record high. The previous record for the refinance share of 78.4 percent occurred the week ended November 9, 2001. The share of ARM activity decreased to 11.4 percent from 13.8 percent the previous week.
"This is a huge refinance number," said MBA Senior Economist Phil Colling. "Mortgage rates are at record lows, and because of that a new set of mortgages have become attractive for refinancing."
Colling said that public awareness also fueled the refinance surge. "People are very aware that rates are at record lows, and they are acting on this," he said.
The average contract interest rate for 30-year fixed rate mortgages decreased to a record low of 5.42 percent from the previous record low 5.57 percent one week earlier, with points increasing to 1.55 from 1.46 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 record low of 4.72 percent from the previous record low of 4.90 percent one week earlier, with points increasing to 1.54 from 1.38 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 record low of 3.29 percent from the previous record low of 3.49 percent one week earlier, with points decreasing to 0.91 from 1.05 the previous week (including the origination fee) for 80 percent LTV loans.
Source: MBA
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