Record on Mortgage and Refinancing Applications
Wednesday, December 03, 2008, Record on Mortgage applications last week as a new Federal Reserve program pushed interest rates down to their lowest level in more than 3 years.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both buy and refinance loans, for the week finished November 28 soared a record 112.1 percent to 857.7, the highest reading since the week finished March 21 when it reached 965.9.
“When rates plummeted following the Fed’s announcement that it would buy GSE debt and MBS, many of those on the sidelines chose to quickly jump in and take advantage of lower rates before they started to rebound,” she said.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 5.47 percent, down a whopping 0.52 percentage point from the previous week, the largest drop since 1990 when the MBA started conducting the weekly survey.
Interest rates are at their lowest level since the week finished June 24, 2005, when they reached the same level. Interest rates are sharply below the peak of 6.59 percent reached during the summer, but only slightly below the 2008 low of 5.49 percent in January, according to the trade group.
Interest rates were below year-ago levels of 5.82 percent.
The Refinancing volume is surges in the weekly activity. Cameron Findlay, chief economist at LendingTree.com based in Charlotte, North Carolina, said they are seeing a positive uptick in refinancing volume due to the drop in interest rates.
“Consumers who were previously on the fence to refinance or buy a home are in a position to take advantage of the decline in rates,” said on Tuesday.
“Now it’ll be a matter of qualification as lenders evaluate each borrower individually,” he said.
The low interest rates can help many drop their monthly payments, and is especially excellent news for those who have adjustable- rate mortgages and are looking to lock in a secure fixed-rate mortgage, he said.
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