Saturday, May 14, 2011

Another Mortgage Refinance Wave?

by Bill McBride on 5/14/2011 10:16:00 PM

Freddie Mac reported this week: 30-Year Fixed-Rate Mortgage Drops to 4.63 Percent

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), which shows mortgage rates at their lowest level for 2011 after declining for the fourth consecutive week. The 30-year fixed-rate averaged 4.63 percent, and the 15-year fixed averaged 3.82 percent.
Will this lead to another wave of mortgage refinancing?

Here is a graph of refinance activity and mortgage rates:

Mortgage rates and refinance activity Click on graph for larger image in graph gallery.

This graph shows the MBA's refinance index (monthly average) and the the 30 year fixed rate mortgage interest rate from the Freddie Mac Primary Mortgage Market Survey®.

Although mortgage rates are at the lowest level this year, it takes lower and lower rates to get people to refi (at least lower than recent purchase rates).

With 30 year mortgage rates still about 0.4 percentage points above the lows of last October, mortgage refinance activity will probably only pickup a little.

Earlier:
Summary for Week Ending May 13th