Refinance Index Increases in Latest MBA Survey
July 31, 2002
Mortgage Loan Applications Up from Previous Week
WASHINGTON, D.C. (July 31) The market composite index of mortgage loan applications -- a measure of mortgage loan applications for purchases and refinancings -- for the week ending July 26 increased 23.2 percent to 1004.3 on a seasonally adjusted basis from 815.2 the previous week, according to the Weekly Mortgage Applications Survey of the Mortgage Bankers Association of America (MBA), which was released today. That was the fourth-highest level of the market composite index since the MBA began the Weekly Mortgage Applications Survey in January 1990. The record of 1055.5 was set the week ended November 9, 2001. On an unadjusted basis, the application index increased 22.5 percent and was up 94.8 percent compared to the same week a year earlier.
"As many major stock indices bottomed early last week and recovered throughout the remainder of the week, many consumers perceived that interest rates had also bottomed and may head back up," said Phil Colling, an MBA economist. "The large increase in the Refinance Index last week was likely caused by consumers scrambling to take advantage of the low mortgage rates before any perceived or real rate increases."
The MBA seasonally adjusted Purchase Index increased to 360.5 from 351.4 the previous week. The seasonally adjusted Refinance Index increased to 4748.8 from 3512.4 the previous week. That was the fifth-highest level of the Refinance Index. The record of 5534.5 was reached the week ended November 9, 2001. Other seasonally adjusted index activity included the Conventional Index, which increased to 1454.4 from 1166.4 the previous week, and the Government Index, which increased to 253.1 from 229.0 the previous week. The Conventional Index reached its second-highest level, just short of the record of 1480.1 the week ended November 9, 2001.
Refinancing activity represented 67.6 percent of total applications, increasing from 61.2 percent the previous week. That was the highest refinance share since the week ended November 23, 2001, when the refinance share was 72.9 percent. The share of ARM activity increased to 18.8 percent from 18.5 percent the previous week. That was the highest ARM share since the week ended June 16, 2000, when the ARM share was 19.5 percent.
The average contract interest rate for30-year fixed rate mortgages was 6.32 percent, increasing from the record low of 6.26 percent the previous week, with points increasing to 1.44 from 1.40 the previous week (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
The average contract interest rate for15-year fixed rate mortgages was 5.73 percent, increasing slightly from the record low of 5.70 the previous week, with points increasing to 1.38 from 1.32 the previous week (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
The average contract interest rate for1-year ARMs was 3.99 percent, increasing from 3.96 percent the previous week, with points increasing to 1.09 from 1.04 the previous week (including the origination fee) for 80 percent LTV loans.
Souce: Mortgage Bankers Association