Mortgage applications skyrocket
According to the Mortgage Bankers Association’s (MBA’s) seasonally adjusted index of mortgage application activity, home mortgages skyrocketed 23.1 percent last week as interest rates dropped. The increase was due mostly in part to a surge in refinancing demand.
The MBA’s seasonally adjusted index of refinancing applications rose 26.4 percent, while the volume of new loan requests for home purchases jumped 10.3 percent.
“With mortgage rates reaching new lows, refinance volume jumped,” said Michael Fratantoni, MBA’s vice president of research and economics. “Purchase activity also increased as buyers returned to the market after the holiday season.”
Refinances now account for 8.2 percent of all mortgage applications, up from 80.8 percent the previous week and rising steadily from weeks prior. Currently, the share of refinances is at its highest point since October 2010.
Current rates
Below are the current average interest rates, according to the MBA:
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 4.06 percent from 4.11 percent, with points increasing to 0.48 from 0.41 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. This is the lowest 30-year fixed rate in the history of the Survey. The effective rate also 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 4.40 percent from 4.34 percent, with points decreasing to 0.37 from 0.47 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also increased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.91 percent from 3.96 percent, with points decreasing to 0.59 from 0.72 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. This is the lowest 30-year FHA rate in the history of the Survey. The effective rate also decreased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.33 percent from 3.40 percent, with points increasing to 0.39 from 0.37 (including the origination fee) for 80 percent LTV loans. This is the lowest 15-year fixed rate in the history of the Survey. The effective rate also decreased from last week.
- The average contract interest rate for 5/1 ARMs remained unchanged 2.90 percent, with points decreasing to 0.45 from 0.49 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. This is the lowest 5/1 ARM rate since MBA started tracking the series in January 2011. The effective rate also decreased from last week.
