The number of people submitting mortgage applications rose last week due to a surge in refinancings. It marked the third consecutive week that application volume overall[IMAGE]has increased. During all three weeks, applications for refinancing have risen while new applications for home purchases have declined.
The ""Mortgage Bankers Association"":http://www.mortgagebankers.org (MBA) reported Wednesday that its measurement of total mortgage loan application volume was up 5 percent for the week ending January 14, 2011.
The trade group's refinance index increased 7.7 percent from the previous week, hitting its highest mark since the
[COLUMN_BREAK]beginning of December. The home purchase index, on the other hand, decreased 1.9 percent from one week earlier.
""Mortgage rates have moved somewhat lower since the beginning of the year, as mixed data on the job market continue to cloud the outlook for the economy,"" commented Michael Fratantoni, MBA's VP of research and economics.
Fratantoni continued, ""Refinance applications have picked up, as borrowers take advantage of lower rates, but purchase applications remain quite low, indicating that home sales are unlikely to pick up any time soon.""
MBA's report detailed average contract interest rates for fixed-rate mortgage products for the week ending January 14. Rates on 30-year fixed mortgages decreased from 4.78 percent the week prior to 4.77 percent. However, rates for 15-year fixed mortgages increased from 4.15 percent to 4.16 percent.
MBA says the refinance share of mortgage activity increased to 73 percent of total applications last week. The adjustable-rate mortgage (ARM) share of activity increased to 5 percent of total applications.
""Data released by Freddie Mac"":http://dsnews.comarticles/adjustable-rate-mortgages-expected-to-gain-favor-with-borrowers-report-2011-01-18 earlier this week show that ARMs are beginning to gain back some favor with mortgage borrowers.