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REFINANCING DIPS AGAIN AS RATES INCH UP.

Byline: Gregory J. Wilcox Staff Writer

Reflecting rising interest rates, mortgage loan applications fell for the third consecutive week, with refinancings accounting for less than 50 percent of the activity for the first time in more than a year, a trade group said Wednesday.

The index measuring total application activity fell 13.3 percent for the week that ended Friday and fell 40.2 percent from the year-ago period, said the Washington, D.C.-based Mortgage Bankers Association of America.

Refinancings accounted for 48.9 percent of applications, down from 53.4 percent the previous week and the eighth consecutive weekly decline, said the Washington, D.C.-based Mortgage Bankers Association of America.

The last time refinancing activity dipped below 50 percent was for the week that ended June 26, 2002.

Nima Nattage, an analyst at FNC Inc., which tracks market information for the mortgage industry, said that the refinancing dip is not surprising since just about any homeowner who wanted to refinance did so when interest rates dipped to historic lows in May and June.

``The fact that that share dropped is attributable to the rise in interest rates,'' he said.

Rates bottomed at 5.21 percent the final week of June.

Last week the MBAA survey found rates averaged 6.22 percent, unchanged from the prior week.

The association's purchase index fell 3.6 percent from the prior week's survey. But applications for home purchases are up 8.9 percent from a year ago, said Jay Brinkmann, the association's vice president of research and economics.

With rates about a percentage point off their low, homeowners looking to refinance will look for bargains in the adjustable market.

Association analysts said that rates for one-year adjustable mortgages inched up to 3.60 percent from 3.49 percent the previous week.

The survey covers approximately 40 percent of all U.S. retail residential mortgage originations.

Brinkmann said it is not surprising to see activity cool, and it does not suggest a market decline is in the offing.

``People were sort of brought into the market in June and July by the low rates. And it may have been that anybody who was on the edge about buying did so back then,'' he said.

And that surge of refinance activity pushed the market into uncharted waters.

Today's rates are not that high, either.

``These are the rates we were looking at last April, and they were considered great rates then,'' he said.
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Title Annotation:Business
Publication:Daily News (Los Angeles, CA)
Article Type:Statistical Data Included
Date:Aug 28, 2003
Words:410
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