Mortgage application volume surged 48 percent on a seasonally adjusted basis for the week ending December 19, the MBA said today.
On an unadjusted basis, the home loan application index increased 50.2 percent compared to one week earlier, and was up 124.6 percent compared to the same period a year ago.
The exceptional increase was led by a 62.6 percent jump in refinance applications and double-digit gains in purchase activity.
The refinance share of mortgage activity now stands at a whopping 83.2 percent of total applications, up from 76.9 percent a week earlier thanks to rapidly falling rates.
The average 30-year fixed slipper further during the week to 5.04 percent, down from 5.18 percent a week prior, while the 15-year fixed dipped two basis points to 4.91 percent.
The 30-year is now at its lowest point since a record low 4.99 percent was achieved during the week ending June 13, 2003 (you know, right before the refinance boom led to the mess we’re in now).
Meanwhile, the one-year ARM fell to 6.36 percent from 6.63 percent, but obviously still far out-prices its fixed-rate brethren.
That might explain why the adjustable-rate share of mortgage activity slipped to just 0.8 percent of total applications.
The weekly MBA survey, conducted since 1990, covers roughly 50 percent of all retail residential mortgage applications.
While the surge in applications is seemingly good news, many applicants will not get approved and it’s clear that most are just looking to refinance out of their high-priced, adjustable-rate mortgages.
It’s a tricky situation, because rates are likely to fall even more, tempting some to wait even longer, but with home prices continuing their slide, those with little equity chance losing the whole deal if the appraisal comes in short.
But ideally home prices will continue to fall despite the low rates so true affordability will improve, not just a homebuilder bailout.
Freddie Mac Says Rates Hit New All-Time Low
Over at Freddie Mac, interest rates fell for the eight consecutive week, hitting a new all-time low for the second week in a row.
The 30-year averaged 5.14 percent, down from 5.19 percent, while the 15-year slipped a single basis point to 4.91 percent.
The five-year ARM fell to 5.49 percent from 5.60 percent and the one-year ARM actually edged up one basis point to 4.95 percent.
These rates are good for conforming loans with a loan-to-value of 80 percent. Rates on jumbo loans are still pricing in the eight-percent range.
Related Topics:
