Mortgage Rates Fall, Mortgage Loan Applications Increase: MBA

For the week ending January 15, 2010, mortgage rates fell even lower, and as a result, the volume of mortgage loan applications increased, according to the Weekly Mortgage Application Survey released Wednesday by the ""Mortgage Bankers Association"":http://www.mbaa.org/default.htm (MBA).

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The Market Composite Index, a measure of mortgage loan application volume, jumped 9.1 percent on a seasonally adjusted basis from the week prior, and on an unadjusted basis, the index surged 10.4 percent. However, mortgage loan application volume on an unadjusted basis plummeted 52.3 percent year-over-year.

Soaring 10.7 percent from the previous week, the Refinance Index also showed notable growth, and the

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seasonally adjusted Purchase Index increased 4.4 percent during the same period. While the unadjusted Purchase Index jumped 9.8 percent compared with the previous week, it dropped 19.1 percent from the same week last year.

According to the report, the four-week moving average for the seasonally adjusted Market Index fell 1 percent, and this average was also 2.4 percent lower for the Refinance Index. However, the four-week moving average for the seasonally adjusted Purchase Index was up 1.1 percent.

Compared to 71.5 percent the prior week, the refinance share of mortgage activity inched up to 71.7 percent. In addition the adjustable-rate mortgage (ARM) share of activity slightly increased to 4.1 percent of total applications, up from 4.0 percent the previous week.

This increase in mortgage loan application volume followed a drop in rates for all loan types. The average interest rate for 30-year fixed-rate mortgages decreased to 5 percent from 5.13 percent, with points declining to 1.05 from 1.17 for 80 percent loan-to-value (LTV) ratio loans, and the average rate for 15-year fixed-rate mortgages fell to 4.33 percent from 4.45 percent, with points increasing to 1.19 from 1.04 for 80 percent LTV loans. In addition, the average rate for one-year ARMs dropped to 6.72 percent from 6.83 percent, with points remaining unchanged at 0.31 for 80 percent LTV loans.