Refi Activity Hits Highest Level in Over Two Years
According to data released today by the Mortgage Bankers Association (MBA), mortgage applications are on the rise again, with refinancing activity leading the way. The MBA Weekly Mortgage Applications Survey for the week ending December 8 showed that its Market Composite Index, a measure of mortgage loan application volume, is at its highest level since October 2005. The refinancing share of mortgage activity was reported at its highest level in more than two years. "The substantial decline in mortgage rates over the past six months, greater than 80 basis points in total, has led to a significant increase in refinance activity. Additionally, we are seeing a steady increase in purchase applications," said Mike Fratantoni, Senior Economist at the Mortgage Bankers Association. The refinance share of mortgage activity increased to 52.6 percent of total applications from 50.1 percent the previous week. The refinance share is at its highest level since April 2004. The adjustable-rate mortgage (ARM) share of activity increased to 24.9 from 23.9 percent of total applications from the previous week. Interestingly, mortgage continued to inch upwards, although the minimal increases did little to dampen application and refinance activity. The average contract interest rate for 30-year fixed-rate mortgages increased to 6.02 from 5.98 percent according to the report, with points increasing to 1 from 0.91 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The average contract interest rate for 15-year fixed-rate mortgages increased to 5.75 percent from 5.66 percent, with points decreasing to 1 from 1.01 (including the origination fee) for 80 percent LTV loans. The average contract interest rate for one-year ARMs, however, decreased to 5.76 percent from 5.79, with points increasing to 0.81 from 0.77 (including the origination fee) for 80 percent LTV loans. The one year rate is at its lowest level since March 2006. For more information, visit http://www.mbaa.com.