Mortgage activity spikes as mortgage rates plunge
Refinancing leads the way
Mortgage activity jumped week-over-week as mortgage rates experienced yet another record-breaking decline, the Mortgage Bankers Association (MBA) said in its weekly mortgage report this morning.
According to the MBA’s Weekly Mortgage Applications Survey for the week ending September 28, 2012, mortgage loan application volume rose 16.6 percent on a weekly basis, led by a spike in mortgage refinancing activity.
The MBA’s Refinance Index rose 20 percent from the previous week.
“Refinance application volume jumped to the highest level in more than three years last week as each of the five mortgage rates in MBA’s survey dropped to new record lows in the survey,” Mike Fratantoni, MBA’s Vice President of Research and Economics, said in a statement.
In this latest data, the total share of activity associated with refinancing increased to 83 percent of all applications, up from 81 percent the previous week.
Mortgage rates at all-time record lows
Average rates for 30-year fixed-rate mortgages (those with conforming loan balances of $417,500 or less) dropped sharply to 3.53 percent from 3.63 percent the previous week.
Jumbo (those with loan balances greater than $417,500) 30-year fixed mortgages fell to an average of 3.82 percent from 3.87 percent one week earlier, while FHA-backed 30-year fixed mortgages dropped to 3.37 percent from 3.44 percent last week.
In addition, average rates for 15-year fixed-rate mortgages also dropped sharply week-over-week – to 2.90 percent from 2.98 percent, while 5-year adjustable rate mortgages (ARMs) averaged 2.59 percent after coming in at 2.61 percent the previous week.
“Financial markets continue to adjust to QE3, as the ongoing presence of the Federal Reserve as a significant buyer of mortgage-backed securities applies downward pressure on rates,” Fratantoni said. “Although there was a slight decline in the HARP share of refinance activity, the level of HARP volume remains steady.”