The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending August 13. The Market Composite Index of mortgage loan applications - a measure of mortgage loan applications - was 689.4, an increase of 11.9 percent on a seasonally adjusted basis from 616.1 one week earlier. On an unadjusted basis, the Index increased by 10.6 percent compared with last week but was down 5.5 percent compared with the same week one year earlier.

The MBA seasonally adjusted Purchase Index increased by 6.2 percent to 467.1 from 440.0 the previous week. The seasonally adjusted Refinance Index increased by 20.9 percent to 1982.7 from 1640.5 one week earlier. Other seasonally adjusted index activity included the Conventional Index, which increased 12.8 percent to 1021.2 from 905.7 the previous week. The Government Index increased 2.3 percent to 135.8 from 132.8 the previous week.

"The jump in refinance loans comes after a fairly steady drop in rates over the last month. More importantly, rates are now about half of a percentage point below where they were this time last year, creating a refinance incentive for many borrowers who have taken out home loans since the middle of last summer," said Jay Brinkmann, MBA's vice president of Research and Economics.

The refinance share of mortgage activity increased to 40.7 percent of total applications from 37.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 33.6 percent of total applications from 34.2 percent the previous week.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.75 percent from 5.80 percent one week earlier, with points increasing to 1.45 from 1.24 the previous week (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.15 percent from 5.16 percent one week earlier, with points decreasing to 1.33 from 1.39 the previous week (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year ARMs increased to 3.95 percent from 3.85 percent one week earlier, with points increasing to 1.16 from 1.02 from the previous week (including the origination fee) for 80 percent LTV loans.

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