With record or near-record low rates for all loan products, mortgage applications last week surged 23 percent on the strength of borrowers seeking to refinance, said the Mortgage Bankers Association.
The MBA’s Refinance Index increased 26.4 percent from the previous week to its highest level since August 8, 2011. Its Purchase Index, measuring mortgage applications for home purchases, surged 10.3 percent. The group’s combined Market Composite Index registered the 23 percent jump.
“Interest rates dropped last week due to continuing anxieties regarding the fragile economic situation in Europe,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. Fratantoni continued, “With mortgage rates reaching new lows, refinance volume jumped and MBA’s refinance index reached its highest level in the last six months. Purchase activity also increased as buyers returned to the market after the holiday season.”
According to Freddie Mac’s records, the 30-year fixed rate mortgage has been on a record slide since October.
Here is Freddie Mac’s weekly update:
- 30-year fixed-rate mortgage averaged 3.88 percent, with an average 0.8 point for the week ending January 19, 2012, down from last week when it averaged 3.89 percent. Last year at this time, the 30-year FRM averaged 4.74 percent.
- 15-year fixed rate mortgage averaged 3.17 percent, with an average 0.8 point, up from last week when it averaged 3.16 percent. A year ago at this time, the 15-year FRM averaged 4.05 percent.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.82 percent this week, with an average 0.7 point, matching last week when it averaged 2.82 percent. A year ago, the 5-year ARM averaged 3.69 percent.
- 1-year Treasury-indexed ARM averaged 2.74 percent this week, with an average 0.6 point, down from last week when it averaged 2.76 percent. At this time last year, the 1-year ARM averaged 3.25 percent.