Mortgage application volume
Although mortgage applications rose slightly by 0.6 percent last week over the prior week, according to the Mortgage Bankers Association, refinances now account for 78.3 percent of the total application volume. Adjustable rate mortgages (ARMs) applications decreased to 6.7 percent of the total application volume while the share of investor applications have risen slightly to 5.7 percent of total applications.
All stats are seasonally adjusted and take into account the recent Labor Day holiday. Refinance applications rose 2.2 from the week prior as homeowners continue to struggle and seek to take advantage of extremely low interest rates. The average interest rate for a 30 year fixed rate mortgage with conforming loan balances is 4.29 percent while the average interest rate on a 30 year fixed rate mortgage with jumbo loan balance dropped to 4.55 last week, down 0.02 percent from the week prior.
FHA backed mortgages average 4.07 percent, a slight drop from the week prior and 15 year fixed rates are down to 3.46 percent.
Mortgages and politics
President Obama has announced that housing is a priority of the administration, but the extent that we have seen it as a priority in recent weeks is a mention of a possible plan to make refinancing mortgages more readily possible for homeowners to keep them in their homes to help avoid foreclosure and continued feeding of homes into the looming shadow inventories.
As we reported yesterday, the luxury real estate market is about to take a major hit as conforming mortgage loans backed by the government under Fannie Mae, Freddie Mac and Federal Housing Administration (FHA) are about to go back to nearly 2008 limits which were substantially lower. On October 1st, the limits will drop across the board, which will instantly make 1.4 million homes ineligible for lower-rate conforming loans.
