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Americans continue to move from adjustable rate mortgages to fixed-rate programs, or take advantage of today's low long-term rates by refinancing their current fixed-rate mortgages, as evidenced by this morning's Market Composite Index, released by the Mortgage Bankers Association (MBA). The Index, which measures and compares mortgage loan application volume from week to week, showed that overall refinance activity increased 6.3 percent for the week ending January 12, as compared to the week ending January 5, 2007. This follows a 17.3 percent increase for the week ending January 5 over the previous week. "With nearly $400 billion in adjustable rate mortgage set to adjust in 2007, we still expect the strong refinance trend we've seen the last four months to continue," says Bob Walters, chief economist of Loans. Purchase activity surprisingly tapered however, dropping seven percent following last week's double-digit gains. "December's employment numbers were higher than expected, and long-term interest rates remain near their lowest point in more than a year. Jobs and interest rates are two of the most significant factors influencing people's decision to buy or refinance a home, so the dip in purchases was unexpected," said Walters.
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