Refinance Apps Jump as Interest Rates Decline

WASHINGTON, D.C. (January 9, 2008) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the New Year’s holiday shortened week ending January 4, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 706.0, an increase of 32.2 percent on a seasonally adjusted basis from 533.9 one week earlier, which was the week between the Christmas and New Year holidays. On an unadjusted basis, the Index increased 81.1 percent compared with the previous week and was up 8.7 percent compared with the same week one year earlier. The Refinance Index increased 53.9 percent to 2494.2 from 1620.9 the previous week and the seasonally adjusted Purchase Index increased 14.7 percent to 414.0 from 360.8 one week earlier. On an unadjusted basis, the Purchase Index increased 56.2 percent to 251.8 from 161.2 the previous week. The seasonally adjusted Conventional Index increased 34.1 percent to 1015.3 from 757.4 the previous week, and the seasonally adjusted Government Index increased 18.2 percent to 190.4 from 161.1 the previous week.

The four week moving average for the seasonally adjusted Market Index is down 4.1 percent to 624.4 from 650.8. The four week moving average is down 3.5 percent to 397.9 from 412.4 for the Purchase Index, while this average is down 4.5 percent to 2031.0 from 2127.4 for the Refinance Index.

The refinance share of mortgage activity increased to 57.7 percent of total applications from 50.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 9.3 from 9.8 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.73 percent from 6.05 percent, with points increasing to 1.10 from 1.05 (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 5.21 percent from 5.61 percent, with points increasing to 1.18 from 1.02 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year ARMs increased to 6.04 percent from 6.00 percent, with points decreasing to 0.99 from 1.00 (including the origination fee) for 80 percent LTV loans.

SPECIAL NOTES

The survey covers approximately 50 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.

The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 500,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation’s residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 3,000 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA’s Web site: www.mortgagebankers.org.