Refi Index Hits 1-Year Low

The Refinance Index fell to a one-year low during the week ended Aug. 8 as the Market Composite Index, an overall measure of mortgage applications, fell to 824.6 on a seasonally adjusted basis from 983.2 the week before, according to the Mortgage Bankers Association of America's Weekly Mortgage Applications Survey.On an unadjusted basis, applications were down 16.3% on the week and 17.6% from the level recorded a year earlier. On a seasonally adjusted basis, the Purchase Index decreased from 456.4 to 409.6, and the Refinance Index declined from 4047.5 to 3238.4, its lowest level since late July 2002. Refinancings represented 55.8% of total applications, down from 58.3% the previous week, while adjustable-rate mortgages accounted for 22.5%. "The contraction in mortgage activity continued last week, with the level of refinance applications falling to about a third of what they were when they peaked in late May and early June," said Jay Brinkmann, the MBA's vice president of research and economics. The average contract interest rate for 30-year fixed-rate mortgages fell from 6.37% to 6.00%, and points (including the origination fee) increased from 1.36 to 1.37 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mbaa.org.