Based on the Weekly Mortgage Applications Survey released by the ""Mortgage Bankers Association"":http://www.mbaa.org (MBA) today, as long-term mortgage interest rates continue to drop well below five percent, the industry is seeing a boom in refinancing of home loans.
According to MBA's study for the week ending March 13, 2009, overall mortgage loan application volume jumped 21.2 percent from the previous week, on a seasonally adjusted basis. On an unadjusted basis, total applications increased 20.7 percent compared with the week before and 31.2 percent compared with the same week last year.
The refinance share of mortgage activity increased to 72.9 percent of total applications, up from 67.9 percent the previous week. The Refinance Index increased 29.6 for the week.
MBA also reported that the seasonally adjusted Purchase Index increased 1.5 percent from one week earlier. The Conventional Purchase Index increased 2.1 percent, and the Government Purchase Index (made up primarily of FHA loans) increased 0.4 percent.
MBA also reported drops in mortgage rates last week across the board. The average contract interest rate for 30-year fixed-rate mortgages (FRMs) decreased to 4.89 percent, down from 4.96 percent. The 30-year rate ties the survey's record low reached in January 2009, MBA reported.
The average interest rate for 15-year FRMs decreased to 4.52 percent last week, down from 4.54 percent.
The average rate for one-year adjustable-rate mortgages (ARMs) also dipped, down to 6.20 percent from 6.21 percent the previous week. The ARM share of activity decreased to 2.0 percent of total mortgage applications; the week before, it was 2.3 percent.
MBA's weekly survey covers approximately 50 percent of all U.S. retail residential mortgage applications, and has been conducted since 1990. Respondents include mortgage bankers, commercial banks, and thrifts.