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Bolstered by Refinance Activity, Mortgage App Volume Jumps 6.7%: MBA

Although purchase applications fell once again, total mortgage loan application volume jumped 6.7 percent for[IMAGE]

the week ending July 2, 2010, due to a continued uptick in refinance applications, the ""Mortgage Bankers Association"":http://www.mortgagebankers.org/default.htm (MBA) reported Wednesday.

According to MBA's Weekly Mortgage Applications Survey, the purchase index fell an additional 2 percent from one week to the next. MBA noted that the index has declined for eight of the last nine weeks.

""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

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month in which buyers were eligible for the tax credit,"" said Michael Fratantoni, MBA's VP of research and economics.

The story was different for the refinance index, though. On a week-to-week basis, the index soared 9.2 percent, hitting the highest refinance index observed in the survey since the week ending May 15, 2009.

This continued uptick in refinance applications pushed the refinance share of mortgage activity up to 78.7 percent of total applications from 76.8 percent the week prior. This, MBA said, marked the highest refinance share observed in the survey since April 2009.

""Mortgage rates remained near record lows last week, as incoming data on the job and housing markets were weaker than anticipated,"" Fratantoni explained. ""As more homeowners locked in to these low rates, the level of refinance applications increased to a new 13-month high.""

While mortgage rates remained at historical lows, MBA reported a slight week-to-week increase in rates. According to its survey, the average contract interest rate for 30-year fixed-rate mortgages inched up to 4.68 percent from 4.67 percent, and the average interest rate for 15-year fixed-rate mortgages edged up to 4.11 percent from 4.06 percent.

About Author: Brittany Dunn

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