More growth in refinancings

Overall mortgage application volume increased last week despite mixed movement in interest rates, the Mortgage Bankers Association reported today.

The market composite index, a measure of home loan application volume, gained 2.8 percent last week, rising to 690.5 on a seasonally adjusted basis from 671.6 one week earlier.

The index that tracks refinancings posted the strongest growth, up 3.5 percent on a seasonally adjusted basis from the week before, while the purchase-loan index grew 2.2 percent. Both indexes were higher for the third consecutive week, according to MBA.

The refinance share of mortgage activity inched up to 46.2 percent of total applications from 46.1 percent the previous week, and the adjustable-rate mortgage (ARM) share of activity increased to 21.9 percent.

Borrowing costs posted mixed growth last week, with the average contract interest rate on 30-year fixed-rate mortgages sinking to 6.03 percent, the 15-year fixed rate gaining to 5.78 percent, and the rate on the 1-year ARM climbing to 5.86 percent.

Points, which are loan-processing fees expressed as a percent of the total loan amount, averaged 1.38 on the 30-year loans, 1.22 on the 15-year, and 0.76 on 1-year ARMs. Statistics are based on loan-to-value ratios of 80 percent.

The Mortgage Bankers Association survey covers approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.

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