Refinancing Mortgage Applications Surge After Weak November

A national index that measures refinancing mortgage applications jumped 9.4 percent last week compared to a week earlier, boosted by the lowest average contract interest rate recorded by the Mortgage Bankers Association for the year.
The MBA’s overall Market Composite Index of mortgage applications increased 4.1 percent last week, but the portion of the measure pertaining to purchases actually dropped 8.2 percent from a week earlier.
It was the refinancing portion of the index that soared, thanks in large part to historically low interest rates.
The average contract interest rate for 30-year fixed-rate mortgages – with conforming loan balances ($417,500 or less) – decreased to 4.12 percent, the lowest rate reported by the mortgage bankers this year, from 4.18 percent the previous week.
The refinance boom follows a lackluster November, the MBA reports.
For the month of November, purchase applications decreased in all loan categories, except for loan amounts greater than $729,000 which saw a 1.9 percent increase in applications from the previous month.
Loans that were $150,000 or less had 10.7 percent fewer applications over the month, while applications for loans between $150,000 and $300,000 decreased 8.9 percent, and applications for loans between $300,000 and $417,000 decreased 8.6 percent.
Of the higher-balance loans, those between $417,000 and $625,000 had a 6.0 percent decrease in applications. The number of applications for loans between $625,000 and $729,000 decreased 5.2 percent over the month.

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