The interest rates for 15- and 30- year fixed-rate mortgages are now at their lowest levels ever recorded in the Weekly Mortgage Applications Survey, released by the Mortgage Bankers Association (MBA). In response, the refinance index has increase almost 30% over the last month, but activity remains below the activity of spring 2009.
The Market Composite Index, a measure of mortgage loan application volume, increased 7.6% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 19.5% compared with the previous week, which included the Independence Day holiday. The Refinance Index increased 8.6% from the previous week and was the highest Refinance Index observed in the survey since the week ending May 15th, 2009. The increase in total refinance applications was driven by a 10.7% increase in conventional refinance applications, while government refinance applications decreased by 4.2%.
"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," said Michael Fratantoni, MBA's Vice President of Research and Economics.
The share of mortgage applications that were refinance applications increased to 79.4% of the total. This was the highest refinance share observed in the survey since April 2009. The adjustable-rate mortgage (ARM) share of activity decreased to 5.2% from 5.5% of total applications from the previous week. The average contract interest rate for 30-year fixed-rate mortgages is now 4.59% and for the 15-year fixed-rate mortgages is now 4.05%. |
