Mortgage Bankers: Refi Applications Rebound to 70%+ of Market

The market share of refinance applications has climbed back above the 70% level as long-term interest rates had their first decline in several weeks, the Mortgage Bankers Association's Weekly Mortgage Applications Survey found. For the week ending Jan. 8, 2010, the Market Composite Index, a measure of mortgage loan application volume, increased 14.3% on a seasonally adjusted basis and 66% on an unadjusted basis from one week earlier, which was a shortened week due to the New Year's holiday. The Refinance Index increased 21.8% from last week's holiday adjusted index while the seasonally adjusted Purchase Index increased 0.8% from one week earlier. The share of refinance activity, which had fallen under 70% during the last two weeks of 2009, rose to 71.5% for the survey period. The market share of adjustable-rate mortgage loan applications remained at 4% for the second consecutive week. The average contract interest rate for 30-year fixed-rate mortgages fell to 5.13% from 5.18%, with points decreasing to 1.17 from 1.28 (including the origination fee) for loans with an 80% percent loan-to-value ratio, the association reported. The average contract interest rate for 15-year FRMs decreased by 17 basis points to 4.45% from 4.62%, while for one-year ARMs the average contract interest rate increased by 41 basis points to 6.83%.