Refinance Activity Falls, MBA Survey Says

MBA (2/13/2008 ) Kemp, Carolyn
After nearly two months of surging activity, refinances finally showed a decline, as did purchase applications, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending February 8.

Refinance activity fell to 67.4 percent of total applications from 69.2 percent the previous week, a 1.8 percent decline.

The Market Composite Index , fell to 1063.5, a decrease of 2.1 percent on a seasonally adjusted basis from 1086.6 one week earlier. On an unadjusted basis, the Index decreased 0.4 percent compared with the previous week but was up 65 percent compared with the same week one year earlier. The four-week moving average for the seasonally adjusted Market Index roseby 3.9 percent to 1046.6 from 1007.4.
The Refinance Index decreased 3.0 percent to 4901.5 from 5054.0 the previous week. The four-week moving average rose by 7.4 percent to 4809.3 from 4477.8.

The seasonally adjusted Purchase Index decreased by 0.3 percent to 403.9 from 405.3 one week earlier.On an unadjusted basis, the Purchase Index increased 5.4 percent to 407.4 from 386.5 the previous week. The four-week moving average fell by 3.4 percent to 402.8 from 417.1. The Conventional Purchase Index increased 0.3 percent while the Government Purchase Index (largely FHA) decreased 3.5 percent.

The seasonally adjusted Conventional Index decreased 1.9 percent to 1522.6 from 1552.6 the previous week; the seasonally adjusted Government Index decreased 3.7 percent to 297.9 from 309.5 the previous week.

The average contract interest rate for 30-year fixed-rate mortgages increased to 5.72 percent from 5.61 percent, with points increasing to 1.15 from 0.98 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages increased to 5.18 percent from 5.09 percent, with points increasing to 1.08 from 0.92 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year adjustable-rate mortgages increased to 5.72 percent from 5.62 percent, with points decreasing to 0.90 from 0.97 (including the origination fee) for 80 percent LTV loans.The ARM share of activity increased to 9.9 percent from 8.8 percent of total applications from the previous week.

The survey covers 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.