Mortgage Applications Rise on Record Low Rates

Mortgage applications increased last week as 30-year fixed rates set new lows, according to records dating back to 1990 from the Mortgage Bankers Association.
The bankers’ Market Composite Index, covering both purchases and refinancing, increased 1.3 percent from one week earlier.
The refinance component of the index rose 2 percent from the previous week to its highest level since February 10, 2012.
The MBA’s survey covers more than 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990.
Respondents include mortgage bankers, commercial banks and thrifts.
The refinance share of mortgage activity increased to 78 percent of total applications from 77 percent the previous week.  This is the highest refinance share since February 24, 2012.
In May 2012, 85 percent of home purchase applications were for fixed-rate 30-year loans, 7 percent for 15-year fixed loans and 6 percent for ARMs.
The number of home purchase applications with a 15-year fixed term is at its highest level of the year as a share of all home purchase applications.
But the number of 15-year fixed refinance applications is at its second lowest level of the year as a share of all refinance applications.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 3.87 percent, the lowest rate in the history of the survey.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.13 percent, also a new low for the survey.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 3.70 percent, another record low for the survey.
All rates are based on 80 percent loan-to-value loans.

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