Housing Bubble

Mortgage applications - more records broken

June 04, 2003

Washington, D.C. – The Market Composite Index of mortgage loan applications – a measure of mortgage loan applications for purchases and refinancings – hit a new record high of 1856.7 for the week ending May 30, up from 1634.6 one week earlier on a seasonally adjusted basis, according to the Weekly Mortgage Applications Survey of the Mortgage Bankers Association of America (MBA) released today. On an unadjusted basis, the Index decreased by 9.2 percent due to the Memorial Day holiday, but was up 202.7 percent compared to the same week a year earlier.

New records were also set for the MBA’s Purchase Index and Refinance Index. The MBA seasonally adjusted Purchase Index increased to 460.5 from 395.7 the previous week. The previous record of 416.0 was set during the week ending May 2nd.

The seasonally adjusted Refinance Index increased to a record high of 9977.8 from 8840.9 one week earlier. The previous record of 9387.0 was set earlier this year for the week ending March 14th.

The overall seasonally adjusted Conventional Index increased to 2716.5 from 2411.6 the previous week, driven by the Conventional Refinance Index that hit 11109.5. The Government Index increased to 421.8 from 338.0 the previous week.

“Refinance activity had appeared to peak in mid-March and had declined steadily until late April. The latest interest rate drops tied to the expressed concerns of the Federal Reserve over deflationary pressures in the economy have led to a new flood of mortgage applications. While almost 77% of the applications are for refinances, applications for mortgages for purchasing homes are also hitting record levels as buyers move to lock in these low rates,” according to Jay Brinkmann, MBA’s Vice President for Research and Economics.

Refinancing activity decreased to 76.7 percent of total applications from 77.1 percent the previous week. The share of ARM activity decreased to 13.1 percent from 13.4 percent the previous week.

Source: Mortgage Bankers Association of America