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Mortgage Applications Drop the Week before Christmas and Increase the Week After

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RISMEDIA, January 6, 2011—The Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey for the weeks ending December 24, 2010 and December 31, 2010. For the week ending December 24, 2010, the Market Composite Index, a measure of mortgage loan application volume, decreased 3.9% on a seasonally adjusted basis from the prior week. For the week ending December 31, 2010, this index increased 2.3% on a seasonally adjusted basis. Both weeks’ results include an adjustment to account for the Christmas and New Year’s Day holidays. On an unadjusted basis, the Index decreased 23.7% the week before Christmas and 10.0% the week after.

For the week ending December 24, 2010, the Refinance Index decreased 7.2% from the previous week and the seasonally adjusted Purchase Index increased 3.1% from one week earlier. The following week, the Refinance Index increased 3.9% and the seasonally adjusted Purchase Index decreased 0.8%. The unadjusted Purchase Index decreased 18.1% the week before Christmas and decreased 12.2% the week following. This measure was 12.1% higher and 6.1% lower, respectively, than the same period a year ago.

The refinance share of mortgage activity for the week ending December 31, 2010 was 71.0%, an increase from 70.3% for the week ending December 24, 2010.

For the week ending December 24, 2010, the average contract interest rate for 30-year fixed-rate mortgages increased to 4.93% from 4.84%, with points decreasing to 0.63 from 0.96 (including the origination fee) for 80 percent loan-to-value (LTV) loans. For the week ending December 31, 2010, the average contract interest rate for 30-year fixed-rate mortgages decreased to 4.82% with points increasing to 1.11.

For the week ending December 24, 2010, the average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 4.22%, with points increasing to 1.34 from 1.19 (including the origination fee) for 80 percent LTV loans. For the week ending December 31, 2010, the average contract interest rate for 15-year fixed-rate mortgages increased to 4.23% with points decreasing to 1.00.

For more information, visit www.mortgagebankers.org.

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