WASHINGTON – Mortgage applications last week rose for the fifth consecutive week, led by a rebound in home purchases, the Mortgage Bankers Association reported today.
For the week ending Feb. 1, the trade group’s Market Composite Index – a measure of mortgage loan application volume – rose 3.0 percent from the previous week’s level to a seasonally adjusted 1,086.6 points, after rising 7.5 percent the week ending Jan. 25. Compared with the same week in 2007, the index rose 73.2 percent.
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The group’s seasonally adjusted Purchase Index rose 12.0 percent to 405.3 from the previous week’s level of 362.0, while the MBA’s seasonally adjusted Refinance Index fell 1.0 percent to 5,054.0 points, dipping from the previous week’s 22.1 percent increase.
The refinancing rate fell, accounting for 69.2 percent of loan applications, compared with the previous week’s 73.0 percent. Atthe same time, the percentage of adjustable-rate mortgages (ARMs) increased 8.8 percent, after rising 8.6 percent the previous week.
The average interest rate for 30-year fixed-rate mortgages last week was 5.61 percent, an increase of 0.01 percent from the week before, while the average rate for one-year ARMs decreased to 5.62 percent from the previous week’s 5.70 percent.
The collapse in the subprime market, which has spurred tougher lending rules, may be prompting borrowers to file multiple applications to ensure financing, Bloomberg News noted. “With tighter lending standards, many applications may be rejected,” said Sam Coffin, an economist at UBS Securities LLC in Stanford, Conn. “Still, the pattern suggests some stimulus from recent declines in interest rates.”
The Mortgage Bankers Association, based in Washington, D.C., is a trade group representing the real estate finance industry. Its 3,000 member companies include mortgage firms, commercial banks, thrifts, life insurance companies and others. Additional information, including the MBA’s Weekly Application Survey, is available at www.mortgagebankers.org.
