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Mortgage Applications Spike; Refis Up 82%

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RISMEDIA, March 27, 2008-The Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey for the week ending March 21, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 965.9, an increase of 48.1% on a seasonally adjusted basis from 652.0 one week earlier. On an unadjusted basis, the Index increased 46.1% compared with the previous week and was up 41.1% compared with the same week one year earlier.

The Refinance Index increased 82.2% to 4255.2 from 2335.2 the previous week and the seasonally adjusted Purchase Index increased 10.6% to 403.7 from 365.0 one week earlier. The Conventional Purchase Index increased 10.7% while the Government Purchase Index (largely FHA) increased 10.1%. On an unadjusted basis, the Purchase Index increased 10.4% to 449.2 from 406.9 the previous week. The seasonally adjusted Conventional Index increased 54.3% to 1310.4 from 849.0 the previous week, and the seasonally adjusted Government Index increased 21.1% to 391.7 from 323.5 the previous week.

“The Federal Reserve acted last week to bring some stability to the mortgage-backed securities market and we saw an immediate impact with a drop in mortgage rates. With a drop in the 30-year fixed rate of at least a quarter of a point, we saw a sharp increase in refinance applications, but applications for home purchases also increased over where they have been the last few weeks, although still below where they were this time last year,” said Jay Brinkmann, MBA’s vice president of Research and Economics.

The four week moving average for the seasonally adjusted Market Index is up 11.3% to 743.6 from 668.4. The four week moving average is up 3.1% to 375.2 from 363.8 for the Purchase Index, while this average is up 18.3% to 2901.9 from 2452.8 for the Refinance Index.

The refinance share of mortgage activity increased to 62.0% of total applications from 49.7% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 3.8 from 7.9% of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.74% from 5.98%, with points increasing to 1.13 from 0.90 (including the origination fee) for 80% loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.23% from 5.24%, with points increasing to 1.15 from 0.97 (including the origination fee) for 80% LTV loans.

The average contract interest rate for one-year ARMs increased to 7.02% from 6.99%, with points increasing to 1.71 from 1.64 (including the origination fee) for 80% LTV loans.

The survey covers approximately 50% 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.

For more information, visit www.mortgagebankers.org.

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