Dennis Norman
While near historic-low mortgage interest rates are causing homeowners to refinance their existing mortgages, it does not appear the rates are bringing out the home-buyers. According to the Mortgage Bankers Association (MBA) weekly mortgage applications survey for the week ending July 2, 2010, the MBA Purchase Index (a measure of the volume of loan applications related to a home purchase) decreased 2.0 percent from the week before. This index has decreased in 8 out of the last 9 weeks.
The four-week moving average of home purchase mortgage applications is up a scant 0.5 percent.
On the other hand, the Mortgage Refinancing index increased 9.2 percent as the refinance share of mortgage applications increased to 78.7 percent this week from 76.8 percent the week before marking the highest refinance share of mortgages since April 2009.
“Mortgage rates remained near record lows last week, as incoming data on the job and housing markets were weaker than anticipated. As more homeowners locked in to these low rates, the level of refinance applications increased to a new 13-month high,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “For the month of June, purchase applications declined almost 15 percent relative to the prior month, and were down more than 30 percent compared to April, the last month in which buyers were eligible for the tax credit.”
Interest rates for the week ended July 2, 2010:
- 30 year fixed-rate mortgage interest rates increased slightly to 4.68 percent from 4.67 percent, with fees decreasing to 0.86 percent from 0.96 percent on loans that are 80 percent of the value of the home.
- 15 year fixed rate mortgage interest rates increased slightly to 4.11 percent from 4.06 percent, with fees decreasing to 0.93 percent from 0.97 percent on loans that are 80 percent of the value of the home.
- One-year ARM interest rates increased slightly to 7.20 percent from 7.05 percent, with fees decreasing to 0.24 percent from 0.27 percent on loans that are 80 percent of the value of the home.
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