Mortgage Applications Up 12% Boosted by Refinance Surge

Mortgage Applications Up 12% Boosted by Refinance SurgeMortgage applications for both purchases and refinancing jumped 11.7 percent last week compared to one week earlier, according to the Mortgage Bankers Association.
The group’s index measuring refinance activity also increased 12 percent from the previous week, but is up only  1 percent from two weeks ago, the week prior to the holidays.
The results for last week include an adjustment to account for the New Year’s Day holiday.
The refinance share of mortgage applications remained at 82 percent. The adjustable-rate mortgage (ARM) share of activity was unchanged at 3 percent of total applications.
The HARP share of refinance applications – applications tied to the government-sponsored Home Affordable Refinance Program – decreased to 25 percent from 27 percent the prior week. HARP was expanded last year to include homeowners deeply “underwater” – those owing more than the value of their homes. HARP applies only to mortgages held by Fannie Mae or Freddie Mac.
The Obama Administration is seeking to expand HARP to the roughly 40 percent of the nation’s mortgages which are not owned by Fannie and Freddie.
The average contract interest rate for 30-year fixed-rate mortgages, with conforming loan balances ($417,500 or less), increased to 3.61 percent from 3.52 percent, for 80 percent loan-to-value ratio (LTV) loans, according to the MBA’s data for last week.
The average contract interest rate for 30-year fixed-rate mortgages, with jumbo loan balances (greater than $417,500), increased to 3.78 percent from 3.75 percent, for 80 percent LTV loans.

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