It’s All About the Refis
Record low interest rates drove mortgage applications higher last week according to the latest weekly survey from the MBA.
During the week ending January 9, mortgage apps increased 15.8 percent on a seasonally adjusted basis compared to one week earlier.
On an unadjusted basis, volume was up a staggering 95.7 percent compared to the previous week and 52.4 percent from the same period a year ago.
The increase in activity was very much about refinancing, which jumped 25.6 percent as purchases fell 14.1 percent and FHA lending slid 21.8 percent.
The MBA’s Refinance Index is now at its highest level since the week ending June 27, 2003.
Speaking of refis, their share of mortgage activity increased to a hefty 85.3 percent of total applications, up from 79.8 percent last week, thanks to low, low rates.
The average 30-year fixed-rate mortgage fell to 4.89 percent from 5.07 percent, a record low in the survey’s 20-year history.
The 15-year fixed fell four basis points to 4.63 percent, while the one-year ARM dipped a single basis point to 5.89 percent.
The ARM share of activity increased to 1.1 percent from 0.9 percent of total applications from the previous week.
Sure numbers are up, keep in mind the MBA’s home loan application index only uses data from retail banks, which have certainly grabbed a larger market share as wholesale lending is all but gone at this point.
And many more apps are being declined because of issues like negative equity, falling property values, and more stringent underwriting guidelines.
Oh yeah, and why isn’t anyone interested in purchasing a new home?
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