Today the Mortgage Bankers Association released the Weekly Mortgage Applications Survey for last week. The survey found that total mortgage activity increased 7.6 percent on a seasonally-adjusted basis from the previous week.
Refinance activity went up 8.6 percent from the week prior. For the first time in several weeks, purchase activity also increased, rising 3.4 percent on a seasonally-adjusted basis.
Michael Fratantoni, Vice President of Research and Economics for the MBA attributed much of the increase to all-time low mortgage rates, saying: “As rates on 30- and 15-year fixed-rate mortgages declined to the lowest levels recorded in the survey, refinance activity increased last week. The refinance index is up almost 30 percent over the past 4 weeks, but is still well below the peak seen last spring. Refinance borrowers, aiming for the lowest possible rate, are getting conventional loans. The strength in purchase applications comes from government loans, likely indicating that prospective buyers are drawn by the lower downpayment requirements.”
Refinance activity accounted for nearly 80 percent of all mortgage applications last week, providing a temporary boon to mortgage bankers, brokers, and lenders. According to Freddie Mac, the current average mortgage rate on a 30 year fixed rate mortgage is 4.57 percent, the lowest since Freddie Mac began keeping track in 1971.
Extremely low mortgage rates are not helping home builders, however, as new home construction is dipping to some of the lowest levels in recent memory.
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