“The substantial decline in mortgage rates over the past six months, greater than 80 basis points in total, has led to a significant increase in refinance activity.  Additionally, we are seeing a steady increase in purchase applications,” said Mike Fratantoni, Senior Economist at the Mortgage Bankers Association.

The seasonally adjusted Refinance Index increased by 15.8 percent to 2304.4 from 1989.7 the previous week and the Purchase Index increased by 8.7 percent to 463.8 from 426.6 one week earlier. The Refinance Index is at its highest level since September 2005 while the Purchase Index is at its highest since January 2006. The seasonally adjusted Conventional Index increased by 11.9 percent to 1079.4 from 964.7 the previous week, and the seasonally adjusted Government Index increased 4.3 percent to 124.1 from 119 the previous week.
 
The four week moving average for the seasonally adjusted Market Index is up 2.9 percent to 647.9 from 629.4.  The four week moving average is up 3.1 percent to 424.6 from 411.9 for the Purchase Index, while this average is up 3.7 percent to 1994.8 from 1924.2 for the Refinance Index.

The refinance share of mortgage activity increased to 52.6 percent of total applications from 50.1 percent the previous week. The refinance share is at its highest level since April 2004. The adjustable-rate mortgage (ARM) share of activity increased to 24.9 from 23.9 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages increased to 6.02 from 5.98 percent, with points increasing to 1 from 0.91 (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 5.75 percent from 5.66 percent, with points decreasing to 1 from 1.01 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year ARMs decreased to 5.76 percent from 5.79, with points increasing to 0.81 from 0.77 (including the origination fee) for 80 percent LTV loans. The one year rate is at its lowest level since March 2006.

**SPECIAL NOTES**

The 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.  Base period and value for all indexes is March 16, 1990=100.

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The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA's Web site:  www.mortgagebankers.org.