Housing Bubble

Refinance Index falls, Purchase Index rises

March 24, 2003

The Market Composite Index of mortgage loan applications - a measure of mortgage loan applications for purchases and refinancings - for the week ending March 21 decreased to 1520.9 on a seasonally-adjusted basis from the record high of 1673.4 one week earlier, according to the Weekly Mortgage Applications Survey of the Mortgage Bankers Association of America (MBA), which was released today. On an unadjusted basis, the Index decreased by 8.8 percent but was up 194.8 percent compared to the same week a year earlier

The MBA seasonally adjusted Purchase Index increased to 383.7 from 347.3 the previous week. The seasonally adjusted Refinance Index decreased to 8135.7 from the record high of 9387.0 one week earlier. This is the third highest Refinance Index in the history of MBA’s Weekly Applications Survey. Other seasonally adjusted index activity included the Conventional Index, which decreased to 2244.6 from 2476.0 the previous week. The Government Index decreased to 313.3 from 334.0 the previous week.

Refinancing activity represented 76.5 percent of total applications, decreasing from the record high of 80.5 percent the previous week. The share of ARM activity increased to 14.7 percent from 12.8 percent the previous week.

“Despite the upturns in equity prices and Treasury note yields, mortgage rates last week remained very favorable,” said MBA Senior Economist Phil Colling. “It is also likely that many homeowners who were hoping for lower mortgage rates before refinancing submitted a refinance application as rates rose the last two weeks.”

Source: Mortgage Bankers Association of America