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Article from MBA NewsLink on Refi’s

Refi Applications Hit 3-Year High as Rates Fall to Record Lows
Sorohan, Mike
Mortgage rates hit record lows for the third consecutive week, triggering the highest level of refinance applications since 2009, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending September 28.

The overall Market Composite Index increased by 16.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 17 percent compared to the previous week. 

The Refinance Index increased by 20 percent from the previous week, reaching its highest level since April 2009. The refinance share of mortgage activity increased to 83 percent of total applications from 81 percent the previous week. The Home Affordable Refinance Program share of refinance applications decreased to 23 percent last week from 26 percent the prior week.

The seasonally adjusted Purchase Index increased by 4 percent from one week earlier. The unadjusted Purchase Index also increased by 4 percent compared to the previous week and was 11 percent higher than the same week one year ago.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 3.53 percent from 3.63 percent, the lowest rate in the history of the survey, with points decreasing to 0.35 from 0.41 (including the origination fee) for 80 percent loan-to-value ratio loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 3.82 percent from 3.87 percent, also a survey record low, with points decreasing to 0.32 from 0.33 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.37 percent from 3.44 percent, a record low, with points decreasing to 0.36 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.90 percent from 2.98 percent, with points decreasing to 0.27 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 adjustable-rate mortgages decreased to 2.59 percent from 2.61 percent, with points decreasing to 0.34 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity remained at 4 percent of total applications.

The survey covers more than 75 percent of all U.S. retail and consumer direct residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.

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