Homeowners Take Advantage of Record-Low Rates

August 16, 2011

OK, so we know that people are not buying homes in America, despite low prices and record-low interest rates.

But it appears that homeowners are refinancing.

Mortgage applications increased 21.7 percent for the week ending August 5 from the prior week, according to the Mortgage Bankers Association Weekly Mortgage Applications Survey.

Approved Mortgage Refinance Application Form with pen, calculatorWhile that includes a Purchase Index decrease of 0.8 percent compared to the previous week, it also marks a 30.4 percent increase on the Refinance Index.

Refinancing a mortgage at these record-low rates can save homeowners hundreds of dollars a month; one plus to the economic downturn.

The refinance share of mortgage activity increased from 70.1 percent last week to 75.6 percent of total applications this week, while the adjustable-rate mortgage (ARM) share of activity dropped from 6.6 percent to 6.1 percent of total applications.

“Amid substantial market turmoil last week, mortgage rates dropped to their lowest levels of the year, and refinance applications jumped more than 30 percent to their highest levels of the year,” said Mike Fratantoni, MBA’s Vice President of Research and Economics.

“Over the past month, refinance application volume has increased by 63 percent. Refinance applications for jumbo loans increased by almost 75 percent relative to last week. Despite these low mortgage rates, applications for home purchase have remained little changed through the summer.”

Categories: Economy, Mortgages

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Thank you for the great article. Yes, I am quite proud to be a mortgage broker and save my customers so much money!

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