Falling Mortgage Loan Rates, Rising Home Prices Boost Refinancings
May 8th 2013 7:25AM
The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications this morning, noting an increase of 7% in the group's seasonally adjusted composite index, following a rise of 1.8% for the previous week.
The seasonally adjusted purchase index increased by 2% from the last report. On an unadjusted basis, the composite index also rose by 7% week-over-week. The unadjusted purchase index increased by 3% for the week and is up 12% year-over-year.
The share of refinancings increased from the previous week's total of 75% to 76%. Adjustable rate mortgage loans now account for 4% of all applications, also unchanged from last week.
The average mortgage loan rate for a conforming 30-year fixed-rate mortgage fell from 3.60% to 3.59%. The rate for a jumbo 30-year fixed-rate mortgage decreased from 3.80% to 3.79%. The average interest rate for a 15-year fixed-rate mortgage dropped from 2.84% to 2.81%, the lowest rate in the history of the MBA survey.
The contract interest rate for a 5/1 adjustable rate mortgage loan rose from 2.55% to 2.53%, another record low.
The rise in mortgage loan applications could reflect the very low rates now available for 15-year and 5/1 adjustable rate mortgage loans. Rising house prices also could be factoring into the rise in refinancings. As houses increase in value and loan rates remain at historic lows, refinancing becomes more attractive provided a homeowner has gold-plated credit.
Filed under: 24/7 Wall St. Wire, Housing, Research Tagged: featured