Rates are down, Mortgage Aps are up
December 7, 2006
Overall mortgage application volume increased 8.1% last week inspired by a significant drop in interest rates according to a news release from the Mortgage Bankers Association.
The seasonally adjusted refinance index increased by 13.7 percent and the purchase index increased by 4.9 percent. The refinance activity represented approximately 50.1 percent of the total applications and is at its highest level since April 2004. This increase in refinance applications may reflect the consumers' desire to get rid of an adjustible rate mortgage and obtain the standard 30 year fixed rate loan.
The average contract interest rate for 30-year fixed-rate mortgages decreased to its lowest level since October 2005, falling to 5.98 percent last week from 6.13 percent the week before.
Hopefully this increase in refinance applications will allay economists fears that the foreclosure rate would increase if the adjustable mortgages had substantial rate adjustments and the borrowers could not make the increased monthly payment.
Also, it seems somewhat significant that the borrowers are staying on top of the interest rate market place and jumping in to take advantage of the favorable interest rate climate.
For a normally slow time in the home buying market, these applications for purchases are adding to the stability of the present real estate market.
Overall mortgage application volume increased 8.1% last week inspired by a significant drop in interest rates according to a news release from the Mortgage Bankers Association.
The seasonally adjusted refinance index increased by 13.7 percent and the purchase index increased by 4.9 percent. The refinance activity represented approximately 50.1 percent of the total applications and is at its highest level since April 2004. This increase in refinance applications may reflect the consumers' desire to get rid of an adjustible rate mortgage and obtain the standard 30 year fixed rate loan.
The average contract interest rate for 30-year fixed-rate mortgages decreased to its lowest level since October 2005, falling to 5.98 percent last week from 6.13 percent the week before.
Hopefully this increase in refinance applications will allay economists fears that the foreclosure rate would increase if the adjustable mortgages had substantial rate adjustments and the borrowers could not make the increased monthly payment.
Also, it seems somewhat significant that the borrowers are staying on top of the interest rate market place and jumping in to take advantage of the favorable interest rate climate.
For a normally slow time in the home buying market, these applications for purchases are adding to the stability of the present real estate market.
posted by shirley harry at 8:25 AM
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