The Mortgage Bankers Association (MBA) Refinancing Index jumped to 8351.1 for the week ending May 16, after posting 7250.0 the previous week. While this could be considered a significant spike in refinancing activity, the numbers are lower than what was predicted by industry experts.

Last week, JPMorgan Securities predicted that the Index would be well over 9000 this week, with the probability of breaking the 10,000 in the next couple of weeks. Meanwhile, Lehman Brothers had also said previously that it expected the Index to average 9000 in the coming weeks as rates remain in record low territory.

MBA economist Phil Colling stated that consumers are taking advantage of the 45-year low in rates, and added that the MBA is now expecting 2003 to be another record year in terms of mortgage originations.

The share of refinancing activity in terms of total application rose to 76% from 72.4% the previous week. On the other hand, the share of ARM activity dropped to 12.5% from 12.7% from the previous week.

In terms of type, the Conventional Index increased to 2313.5 from 2078.3 the previous week and the Government Index decreased to 310.2 from 315.7 the prior week.

The MBA also reported another dip in rates. The 30-year fixed rate dipped to a record low of 5.17%, a 10 basis point drop. Meanwhile, Freddie Mac will be releasing its mortgage rate survey tomorrow. Countrywide Securities predicts another decline in the survey rate, expecting it to print around 5.40% — a new record low —  from 5.45% the week prior.

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