Has the Fed Led Us into a Mini Refi Boom?
Mortgage News from Quicken Loans
Mortgage loan applications hit their highest level in 11 weeks after rising for the second consecutive week, according to The Mortgage Bankers Association today in their Weekly Mortgage Applications Survey. For the week ending Aug. 11, the Market Composite Index showed applications overall increased 1.4 percent on a seasonally adjusted basis from the previous week.
Although the Purchase Index eased 0.8 percent, the Refinance Index saw robust growth, increasing 4.6 percent from the previous week.
"The Fed gave everyone in an adjustable rate mortgage a gift earlier this month by halting, at least in the interim, short-term rate hikes. With long-term rates still near 20-year lows, and $2.5 trillion in existing ARMs, opportunistic homeowners refinancing out of ARMs into fixed-rate programs have created something of a mini refi boom," says Bob Walters, chief economist of Quicken Loans. "Last week's drop in long-term rates also led to a surge in home buying activity as consumers locked in rates before they rise again."
This article is reprinted by permission from Quicken Loans © 2006 Quicken Loans Inc. All rights reserved.
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