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Housing News

Homeowners applying to refinance hits three-year high

Mortgage application volume rose this week, as did the portion of applications that were refinances, hitting a three-year high.

Mortgage application volume rises

According to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 20, mortgage applications increased 0.9 percent from one week earlier, and refinance applications came at a volume not seen since April 2009.

The MBA reports that the Market Composite Index, a measure of mortgage loan application volume, increased 0.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index also increased 0.9 percent compared with the previous week. The Refinance Index increased 2 percent from the previous week to its highest level since April 19, 2009. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier to its lowest level since June 22, 2012. The unadjusted Purchase Index decreased compared with the previous week.

The refinance share of mortgage activity increased to 81 percent of total applications from 80 percent the previous week, and while this rate has hovered around 80 percent for some time, in recent weeks, it has been edging upward.

Current loan rates

According to the MBA:

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  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) remained unchanged at 3.74 percent, the lowest rate in the history of the survey, with points decreasing to 0.43 from 0.45 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The 30-year fixed rate has been below 4 percent since the week ending May 4, 2012. The effective rate decreased from last week.
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 3.99 percent from 3.98 percent, with points decreasing to 0.28 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.52 percent, the lowest rate in the history of the survey, from 3.55 percent, with points increasing to 0.52 from 0.44 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
  • The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.07 percent, the lowest rate in the history of the survey, from 3.12 percent, with points decreasing to 0.45 from 0.48 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
  • The average contract interest rate for 5/1 ARMs decreased to 2.68 percent, the lowest rate in the history of the survey, from 2.71 percent, with points decreasing to 0.35 from 0.51 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

1 Comment

1 Comment

  1. Pakistan Real Estate

    July 26, 2012 at 5:04 am

    Tara, I appreciate this informative content which you have provided. The home owners are refinancing to pay off their previous mortgage loans which they have taken in their financial tough times. It will take time for the real estate market to be strengthened again.

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