Refinancing Seen Boosting Loan Applications in Week

Refinancings drove a week-to-week increase in loan applications, the Mortgage Bankers Association's Weekly Mortgage Applications Survey found. MBA's Market Composite Index for the week of Feb. 26, 2010, a measure of mortgage loan application volume, increased 14.6% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 15.5% compared with the previous week. The Refinance Index increased 17.2% from the previous week, as long-term rates fell back below the 5% line. However, commented Michael Fratantoni, MBA's vice president of research and economics, "Purchase activity remains subdued, with application volumes remaining within the narrow range seen in the last few months." The seasonally adjusted Purchase Index increased 9.0% from one week earlier. The market share of refi applications was 69.1% of total applications, up from 68.1% the previous week. The market share of applications for adjustable-rate mortgages increased to 4.8% from the previous week's 4.7%. The average contract interest rate for 30-year fixed-rate mortgages is 4.95%, down 8 basis points from the previous week's 5.03%, with points declining to 0.99 from 1.34 (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 also declined by 8 bps to 4.27%. The average contract interest rate for one-year ARMs declined by 3 bps to 6.77% from 6.80%.