Mortgage Applications Surge
The Mortgage Bankers Association on Wednesday issued its weekly report on US home loan applications, showing a rise in requests as interest rates fell to yearly lows, lowering borrowing costs and sparking a surge in demand for mortgage refinancing. The group's seasonally adjusted index of mortgage application activity, which tallies requests for both purchase loans and refinance demand, rose a staggering 21.7 percent for the week ended August 5th.
The MBA's measure of refinancing requests, also adjusted for seasonal factors, rose 30.4 percent during the week to its highest level of the year, a reflection of the lowest interest rates available since the year began. The group's seasonally adjusted index of purchase applications, meanwhile, fell by just under 1 percent.
The percentage of total mortgage applications accounted for by refinance requests jumped from 70.1 percent in the week ending July 29th to 75.6 percent a week ago. The increase in refinancing demand was a direct result of lower interest rates, as the average rate for a 30 year fixed-rate mortgage during the week was 4.37 percent, according to Freddie Mac, down 8 basis points from the prior week.
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