Refinance Mortgage Applications Reach 14-Month High: MBA
The volume if mortgage applications submitted in the week ending July 16 rose a seasonally adjusted 7.6% from the previous week, according to the Mortgage Bankers Association (MBA). At the same time, a separate survey measuring household mortgage application activity ticked down slightly. MBA found the volume of applications submitted for refinance jumped 8.6%, pushing the refinance share of application activity to 79.4%, from 78.7% last week. It marks the highest refinance index in 14 months, since May 15, 2009. "As rates on 30- and 15-year fixed-rate mortgages declined to the lowest levels recorded in the survey, refinance activity increased last week," said Michael Fratantoni, MBA's Vice President of Research and Economics. "The refinance index is up almost 30% over the past 4 weeks, but is still well below the peak seen last spring." Fratantoni added: "Refinance borrowers, aiming for the lowest possible rate, are getting conventional loans. The strength in purchase applications comes from government loans, likely indicating that prospective buyers are drawn by the lower downpayment requirements." The volume of applications submitted for purchase mortgages rose 3.4%. Conventional purchase applications were essentially flat this week, increasing 0.3%, while purchase applications for government-insured mortgages (through FHA or VA) jumped 8%. The Mortgage Maxx index, which adjusts data to reflect the number of households applying for a mortgage, showed household application activity slip 0.4% in the same week after soaring 10.1% in the week before. Mortgage Application Index -- or MAX -- publisher Paul Descloux, in weekly commentary on the index, wrote: "The MAX reaches its full potential on historically robust mortgage affordability as further gains in the MAX appear capped." Write to Diana Golobay.