Mortgage application volume jumped 33.4 percent on a seasonally adjusted basis for the week ending September 12 as mortgage rates continued their slide, the MBA said today
On an unadjusted basis, the index was up 65.3 percent compared to the previous holiday-shortened week, but remained 1.3 percent lower than the same week a year earlier.
The refinance index increased a whopping 88.1 percent from the previous week, while purchases and FHA applications saw more modest gains.
The refinance share of mortgage activity surged to 51.6 percent of total applications, up from 36.3 percent a week prior.
Mortgage rates continued to improve, as the average 30-year fixed-rate mortgage fell to 5.82 percent from 6.06 percent.
The 15-year fixed decreased to 5.54 percent from 5.73 percent, and the one-year ARM fell five basis points to 6.95 percent.
That may explain why the adjustable-rate share of mortgage activity decreased to just four percent from 6.4 percent a week earlier.
“The drop in mortgage rates reflected the Treasury’s announcement that Fannie Mae and Freddie Mac were placed under conservatorship of the Federal Housing Finance Agency,” said Orawin Velz, MBA’s Associate Vice President of Economic Forecasting.
“Renewed financial concerns should keep long-term Treasury yields low and translate to lower mortgage rates in the near term despite some widening in mortgage spreads. We expect to see meaningful increases in mortgage demand in coming weeks on both the purchase and refi sides.”
The question remains whether these low rates will actually make a significant impact, or simply lead to more heartache for desperate borrowers unable to meet tougher guidelines.
(photo: jamesgordon)
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