MBA Index

A surge in refinance applications pushed the Mortgage Bankers Association mortgage composite index up 48% to 1245.4 for the week ending Dec. 19 from 841.4 the previous week. "The refinance index increased 62.5% to 6758.6 on a seasonally adjusted basis and the purchase index increased 10.6% to 316.5. "The refinance share of mortgage activity increased to 83.2% of total applications from 76.9% the previous week," MBA said. Borrowers are taking advantage of falling mortgage rates and going for fixed-rate financing. Less than 1% of applications involved adjustable-rate mortgages. The 30-year fixed-rate mortgage averaged 5.04% during the week of Dec. 19. But MBA economist Orawin Velz said she does not expect rates to go much lower. Nevertheless, the MBA associate vice president for forecasting expects refinancings will jump from $165 billion in the fourth quarter to $230 billion in the first quarter.