by Bill McBride on 10/03/2012 07:01:00 AM
Wednesday, October 03, 2012
The Refinance Index increased 20 percent from the previous week. This was the highest Refinance Index recorded in the survey since April of 2009. The seasonally adjusted Purchase Index increased 4 percent from one week earlier.Click on graph for larger image.
“Refinance application volume jumped to the highest level in more than three years last week as each of the five mortgage rates in MBA's survey dropped to new record lows in the survey,” said Mike Fratantoni, MBA’s Vice President of Research and Economics. “Financial markets continue to adjust to QE3, as the ongoing presence of the Federal Reserve as a significant buyer of mortgage-backed securities applies downward pressure on rates."
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 3.53 percent from 3.63 percent, with points decreasing to 0.35 from 0.41 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
The first graph shows the refinance index.
The refinance activity is at the highest level since 2009. Refinance activity has been generally moving up over the last year, and really took off last week.
The second graph shows the MBA mortgage purchase index. The purchase index is up 5% over the last two weeks.
However the purchase index has been mostly moving sideways over the last two years.
Posted by Bill McBride on 10/03/2012 07:01:00 AM