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October 31, 2014

Refi Applications Boost Loan Demand

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Refi Applications Boost Loan Demand

As mortgage rates hover nearly yearly lows, more home owners are viewing it as the last opportunity to take advantage by refinancing and lowering their borrowing costs.

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Last week, refi applications dipped, while the previous week's activity had shown strength.

An increase in applications for refinancings last week helped overall mortgage applications reverse course and post a rise for the week ending Aug. 1, according to the Mortgage Bankers Association’s weekly mortgage activity index, which reflects 75 percent of the U.S. retail residential mortgage application market.

Overall, the MBA’s seasonally adjusted index, which reflects mortgage demand for refinancing and home purchases, ticked up 1.6 percent last week, following a 2.2 percent fall the week prior.

Broken out, refinancing applications increased 3.8 percent during the week while applications for home purchases, viewed as a leading gauge of future home sales, fell 1.3 percent.

The 30-year fixed-rate mortgage remained near yearly lows during the week, averaging 4.35 percent, up 2 basis points from 4.33 percent the week prior, the MBA reports.

Source: “U.S. Mortgage Applications Rise in Latest Week: MBA,” Reuters (Aug. 6, 2014)