Wednesday, February 3, 2010
Demand Heats the Market
Mortgage demand jumped 21 percent on a seasonally adjusted basis (23.5% unadjusted) during the week ending January 29 compared to one week earlier, according to the Mortgage Bankers Association.
“Mortgage application volume rebounded last week, returning the purchase and refinance indexes to levels from mid-December,” said Michael Fratantoni, MBA’s Vice President of Research and Economics, in a release.
“Rates continue to hover around 5 percent, quite low by historical standards, but are well above the record lows seen in 2009, and hence are not generating substantial refi volume. We expect that rates will rise over the next few months as the Federal Reserve winds down its MBS purchase program, and this will likely lead to a decline in refinance volume.”
The refinance index surged 26.3 percent during the week, while seasonally adjusted purchase applications increased more than 10 percent.
Unadjusted purchase demand was up 17.5 percent week-to-week, but still off 11.2 percent compared with the same week a year ago.
The refinance share of mortgage activity increased to 69.2 percent of total applications from 67.6 percent one week earlier as interest rates displayed little movement.
Both the popular 30-year fixed-rate mortgage and the 15-year fixed dipped a single basis point to 5.01 percent and 4.33 percent, respectively.
The one-year adjustable-rate mortgage decreased to 6.70 percent from 6.84 percent, while the ARM-share of total applications fell to 4.5 percent from 4.7 percent.
The MBA’s weekly survey covers more than half of all retail, residential home loan applications, but does not factor out duplicates or declined apps.
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