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Record Low Mortgage Rates Boost Refinance Activity in Latest MBA Weekly Survey

WASHINGTON, D.C. - January 14, 2009 - (RealEstateRama) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 9, 2009.  The Market Composite Index, a measure of mortgage loan application volume, was 1324.8, an increase of 15.8 percent on a seasonally adjusted basis from 1143.8 one week earlier.  On an unadjusted basis, the Index increased 95.7 percent compared with the previous week and was up 52.4 percent compared with the same week one year earlier.The Refinance Index increased 25.6 percent to 7414.1 from 5904.5 the previous week and the seasonally adjusted Purchase Index decreased 14.1 percent to 295.8 from 344.2 one week earlier. The Refinance Index is at its highest level since the week ending June 27, 2003, when it was 8599.1.

The seasonally adjusted Conventional Purchase Index decreased 10.3 percent while the Government Purchase Index (largely FHA) decreased 21.8 percent.

The four week moving average for the seasonally adjusted Market Index is up 10.8 percent.  The four week moving average is up 0.8 percent for the seasonally adjusted Purchase Index, while this average is up 13.8 percent for the Refinance Index.

The refinance share of mortgage activity increased to 85.3 percent of total applications from 79.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 1.1 percent from 0.9 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.89 percent from 5.07 percent, with points increasing to 1.20 from 1.16 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The contract rate for 30-year fixed-rate mortgages is the lowest recorded in the survey. The previous low was 4.99 percent for the week ending June 13, 2003.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.63 percent from 4.67 percent, with points decreasing to 1.14 from 1.16 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year ARMs decreased to 5.89 percent from 5.90 percent, with points decreasing to 0.11 from 0.31 (including the origination fee) for 80 percent LTV loans.

**SPECIAL NOTES**

Please note that the survey results scheduled to be released on Wednesday, January 21, 2009, will be released at 7 a.m. on Thursday, January 22, 2009 instead due to Inauguration Day.

The survey covers approximately 50 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990.  Respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990=100.

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The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 370,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation’s residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,400 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA’s Web site:  www.mortgagebankers.org.

Contact:

Carolyn Kemp
(202) 557-2727
ckemp (at) mortgagebankers (dot) org

Tagged as: LTV, LTV loans, MBA

 

 

 

 

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