MORTGAGE LOAN APPLICATIONS INCREASE

The Market Composite Index, a measure of mortgage loan application volume, increased 3.6 percent to 575.6 on a seasonally adjusted basis for the week ending Dec. 29 compared with 555.8 one week earlier, according to a report released today by the Mortgage Bankers Association (MBA).

On an unadjusted basis, the Index decreased 27.4 percent for the week ending Dec. 29 compared with the previous week and was up 6.9 percent compared with the same week one year earlier.The refinance share of mortgage activity decreased to 48.1 percent of total applications for the week ending Dec. 29 from 48.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 20.4 for the week ending Dec. 29 from 23.1 percent of total applications from the previous week. The ARM share is at its lowest level since July 2003.

The average contract interest rate for 30-year, fixed-rate mortgages increased to 6.22 for the week ending Dec. 29 from 6.12 percent, with points decreasing to 0.92 from 0.96 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year, fixed-rate mortgages increased to 5.93 percent for the week ending Dec. 29 from 5.84 percent, with points decreasing to 1 from 1.06 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year ARMs decreased to 5.84 percent for the week ending Dec. 29 from 5.87, with points increasing to 0.83 from 0.8 (including the origination fee) for 80 percent LTV loans, according to the report.

**Taken from the California Association of Realtors Bulletin, dated January 3, 2007.