Homeowners and Home Buyers Taking Advantage of Interest Rates

March 09, 2011

Home mortgage applications increased to the biggest level since last June as the housing market continues to show improvement.

According to the Mortgage Bankers Association Weekly Mortgage Applications Survey for the week ending March 4, mortgage applications rose 15.5 percent from the previous week. On an unadjusted basis, the index increased 16.1 percent.

Chicago real estate mortgageThe Refinance Index increased 17.2 percent from the previous week, its highest mark since the week ending January 14, and the Purchase Index rose 12.5 percent from a week ago, its highest index recorded this year.

“Taking into account typical seasonal patterns, purchase applications rose to their highest level of the year last week. On an unadjusted basis, purchase application activity is the highest since last May,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “An improving job market is beginning to pave the way for an improving housing market.

“Additionally, mortgage interest rates remained below 5 percent for a second week, maintaining affordability for buyers and leading to an increase in refinance applications.”

According to Freddie Mac, here are the mortgage interest rates for the week ending March 3:

*30-year fixed-rate mortgage: Averaged 4.87 percent, down from the prior week’s 4.95 percent.

*15-year FRM: Average 4.15 percent, down from 4.22 percent the previous week.

*5-year Treasury-indexed hybrid adjustable-rate mortgage: Averaged 3.72 percent, down from 3.8 percent the week prior.

*1-year Treasury-indexed ARM: Averaged 3.23 percent, a drop from 3.4 percent the week before.

“Interest rates for 30-year fixed mortgages were almost 0.2 percentage points below this year’s high set just three weeks ago,” said Frank Nothaft, vice president and chief economist for Freddie Mac. “This means that homebuyers could now expect to pay $263 less per year on a $200,000 loan.”

Sounds like a good reason to take advantage of the current mortgage interest rates.

Categories: Economy, Mortgages

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