NEW YORK - Mortgage applications plunged 7.4% in the week ended March 16, according to data from the Mortgage Bankers Association's Weekly Mortgage Applications Survey.

The refinance index dropped 9.3% and the purchase index slipped 1.0%.

The four-week moving average for the seasonally adjusted market index fell 2.79%. The seasonally adjusted purchase index four-week moving average rose 3.25%, while this average is down 4.31% for the refinance index.

Refinances accounted for 73.4% of volume, the lowest level since July 2011, down from 75.1% the week before. The adjustable-rate mortgage (ARM) share of activity decreased to 5.6% from 5.8%.

"With the rate increase last week, refinances are obviously slowing, and the refinance share at 73% is down to its lowest level since last July. With rate/term refinances falling as we go forward, HARP will be a bigger percentage of refinances but will be more concentrated in certain states," said Jay Brinkmann, MBA's Senior Vice President of Research and Education. Brinkmann continued, "Some of the largest institutions are reporting that the HARP share of their refinances remained at about 30% last week, but HARP volume is not equal across the country. The states that I started referring to years ago as the sand states that had the worst delinquencies we now should start calling the HARP states for mortgage refinances. We saw big state-level differences in refinance applications for February over January: Florida was up 49%, Arizona was up 61%, and Nevada was up 71%. Refinances in the rest of the country were generally flat or even down. For example, Texas had no change, Colorado was down 3%, Connecticut was up only 2%, and Virginia was up 1%. HARP clearly is a driving force in those states that saw the most defaults and the biggest drops in home equity."

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 4.19% from 4.06%.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.47% from 3.36%.

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