Refi applications continue their rebound
Interest rate on 15-year fixed-rate mortgage falls below 5%, MBA data show
By Amy Hoak, MarketWatch
Last update: 7:03 a.m. EST Jan. 23, 2008Print E-mail RSS Disable Live Quotes
CHICAGO (MarketWatch) -- The volume of mortgage applications filed last week rose a seasonally adjusted 8.3% compared to the prior week as mortgage interest rates continued their decline, the Mortgage Bankers Association reported on Wednesday.
Refinance applications drove the increase: Applications to line up new financing on an existing loan rose 16.9% during the week ended Jan. 18, compared with the previous week, according to the MBA's weekly survey.
"Refinance applications are up 92% since the beginning of November and purchase applications are up 7%," said Jay Brinkmann, the MBA's vice president of research and economics.
"With tighter credit conditions, we do not know how many of these applications will become loans, but it is clear that borrowers are responding to the 40- to 80-basis-point drop in rates we have seen since Nov. 2," he said in a news release.
Week-to-week applications for mortgages to purchase a home decreased a seasonally adjusted 4.6%, the MBA said.
Total applications were up 63.7%, compared with the same week in 2007. The four-week moving average for all loans was up 13.7%.
Fully 66% of all applications were for refinance loans in the latest week, an increase from 62.7% the previous week. Applications for adjustable-rate mortgages accounted for 9.3%, up from 9.2% the previous week.
The average interest rate for the 15-year fixed-rate mortgage, a popular option for homeowners seeking to refinance, was 4.96% last week, down from 5.07% the previous week. The 30-year fixed-rate mortgage averaged 5.49% last week, down from 5.62% the previous week.
The rate on a one-year ARM averaged 5.51%, down from 5.77%.
The MBA survey covers about half of all U.S. retail residential mortgage applications.
Amy Hoak is a MarketWatch reporter based in Chicago