Low Long-Term Rates Sustain Refinance Boom
Mortgage News from Quicken Loans
Low long-term interest rates continue to attract homeowners who are looking to refinance their existing mortgage, according to the latest Weekly Mortgage Applications Survey, released today by the Mortgage Bankers Association (MBA).
The MBA reports that its Market Composite Index, which measures mortgage loan application volume, shows the number of people applying to refinance their mortgage increased 0.2 percent for the week ending February 2, as compared to the previous week.
Consumers looking to purchase a home seemed to stay on the sidelines, however, despite long-term interest rates that are as low as they have been in more than a year. According to the MBA, the Purchase Index decreased 0.8 percent from one week earlier.
"Housing seems to have the wind at its back with long-term interest rates, which were already in the low to mid-sixes, falling slightly after last week's Fed announcement, so it's surprising to see that purchase activity actually tapered in the last week," says Bob Walters, chief economist of Quicken Loans. "Folks with adjustable rate mortgages see the opportunity, however, and are refinancing into fixed-rate mortgages before their existing mortgages reset to interest rates that are higher than current long-term rates."
This article is reprinted by permission from Quicken Loans © 2007 Quicken Loans Inc. All rights reserved.
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