Mortgage application volume surged 112.1 percent on a seasonally adjusted basis for the week ending November 28, the MBA reported today.
On an unadjusted basis, the home loan application index jumped 51.4 percent compared to one week earlier, taking into account the Thanksgiving holiday, but still remains 21.9 percent below year-ago levels.
“When rates plummeted following the Fed’s announcement that it would buy GSE debt and MBS, many of those on the sidelines decided to quickly jump in and take advantage of lower rates before they began to rebound,” said Orawin Velz, Associate Vice President of Economic Forecasting.
The refinance index jumped a whopping 203.3 percent, while purchase apps and FHA lending both increased nearly 40 percent.
Thanks to the recent surge in refinance activity, such applications accounted for 69.1 percent of the total, up from just 49.3 percent last week.
And it’s quite clear that those looking to refinance are going after fixed-rate mortgages, as the adjustable-rate mortgage share of applications slipped to just 1.4 percent of total activity.
The benchmark 30-year fixed averaged 5.47 percent, down from 5.99 percent a week earlier, while the 15-year fixed dropped to 5.13 percent from 5.78 percent.
The less favorable one-year ARM decreased to 6.61 percent from 6.87 percent a week prior.
The MBA’s weekly survey covers about half of all retail residential mortgage applications, but doesn’t take into account multiple or declined applications.
While an increase in application volume is certainly a good thing, falling home values and more stringent guidelines will definitely prevent many borrowers from actually getting the approval they so desperately need.
(photo: jermudgeon)
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