Fixed Mortgage Interest Rates Remain Near Record Lows
October 9, 2002
Mortgage Loan Applications Reach New Record Highs In Latest MBA Weekly Survey
WASHINGTON, D.C. (October 9, 2002) The Market Composite Index of mortgage loan applications -- a measure of mortgage loan applications for purchases and refinancings -- for the week ending October 4 increased 2.5 percent to its highest-ever level of 1317.0 on a seasonally-adjusted basis from its previous highest level of 1285.4 the previous, according to the Weekly Mortgage Applications Survey of the Mortgage Bankers Association of America (MBA), which was released today. Last week was the eleventh consecutive week that the Market Composite Index has been above 1000. On an unadjusted basis, the Index also increased 2.5 percent and was up 53.2 percent compared to the same week a year earlier.
The MBA seasonally adjusted Purchase Index decreased to 352.5 from 359.4 the previous week. The seasonally adjusted Refinance Index increased to its highest-ever level of 6926.9 from its former record high of 6671.4 the previous week. Last week was the eleventh consecutive week that the Refinance Index has been above 4000, and the Refinance Index has been above 5000 during eight of those ten weeks. The Refinance Index has been above 6000 during three of those ten weeks. Other seasonally adjusted index activity included the Conventional Index, which increased to 1921.6 from 1880.2 the previous week. The Government Index increased to 308.1 from 292.8 the previous week.
"The economy appears to be growing, albeit very slowly," noted Phil Colling, an MBA economist. "This growth, combined with stock market losses and no signs of inflation, have pushed interest rates down to their lowest levels in 40 years. Until there is economic news that leads to a significant and sustained stock-market rally, we can expect interest rates to remain near their current levels."
Refinancing activity represented 77.9 percent of total applications, increasing from 76.9 percent the previous week. The highest refinance share of 78.4 percent occurred the week ended November 9, 2001. The share of ARM activity increased to 13.4 percent from 12.5 percent the previous week.
The average contract interest rate for30-year fixed rate mortgages increased slightly 5.87 percent from its record low of 5.84 percent the previous week, with points increasing slightly to 1.46 from 1.43 the previous week (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The 30-year fixed rate has now been below 6.00 percent for four consecutive weeks, below 6.20 percent for ten consecutive weeks and below 6.50 percent for 16 consecutive weeks.
The average contract interest rate for15-year fixed rate mortgages decreased to a record low of 5.16 percent from the previous record low of 5.20 percent the previous week, with points increasing to 1.37 from 1.30 the previous week (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The 15-year fixed rate has now been below 5.50 percent for six consecutive weeks and below 6.00 percent for 17 consecutive weeks.
The average contract interest rate for 1-year ARMs was 4.03 percent, decreasing slightly from 4.04 percent the previous week, with points increasing to 1.11 from 1.07 the previous week (including the origination fee) for 80 percent LTV loans.
Source: Mortgage Bankers Association