Mortgage activity continues its positive trend this week with loan application and refinancing volume reaching the highest levels since 2009. Languishing throughout the spring, significant new activity may signal a great summer housing season.
The Mortgage Bankers Association (MBA) released its latest data indicating a substantial rise over the preceding week. MBA’s weekly survey of mortgage banks, commercial banks, and thrifts covers over 75 percent of all residential mortgage applications.
Mortgage loan applications saw a huge leap of 18 percent (seasonally adjusted), the highest level of increase in three years. The weekly study revealed a 30 percent increase on an unadjusted basis. Activity in the refinance sector increased 19 percent over the previous week, also the highest since 2009. Refinancing accounted for 79 percent of total application activity, up one percent.
Lower mortgage rates, steadily dropping throughout the 2nd quarter before settling to historic lows, could be finally giving the housing market a long-awaited boost. Pent up demand coupled with low rates are driving this weeks dramatic increase. With the economic outlook still in flux, first-time homebuyers and those seeking to refinance have the best window of opportunity to take advantage of these historic low rates.
According to Michael Fratantoni*, MBA’s Vice President of Research and Economics, “Refinance volume increased as borrowers were able to lock in at mortgage rates below 4 percent, and purchase application volume was its highest level in over six months. HARP volume has been steady in recent weeks at about 28 percent of refinance applications.”
An increase in refinance application volume is predicted as the Federal Housing Administration’s Streamline Refinance Program kicks into effect on June 11th. Lower fees and a less onerous qualification process offer borrowers a chance to streamline their refinance application and lower their monthly payment.
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