Lower Rates Fuel Mortgage Refinancing Surge to 12-Month High

Falling fixed mortgage rates in recent weeks have revived the refinancing market, with widely followed indices from mortgage bankers hitting their highest levels since January 2015.

Mortgage applications, for both purchases and refinancing, jumped 8.2 percent from one week earlier, according to data from the Mortgage Bankers Association released Wednesday.
The bankers’ refinancing market indices altogether increased 16 percent from the previous week. That’s a level not reached in 13 months. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier, indicating that most homeowners are seeking refinancing deals as mortgage rates for 30-year loans hover in the 3.6 percent to 3.9 percent range.
The MBA also reported that the refinance share of mortgage activity increased to its highest level since February 2015, 64.3 percent of total applications, from 61.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.7 percent of total applications.
The FHA share of total applications decreased to 11.5 percent from 12.3 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages, with conforming loan balances ($417,000 or less), decreased to its lowest level since April 2015, 3.83 percent, from 3.91 percent, with points decreasing to 0.36 from 0.41 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. ,
The average contract interest rate for 30-year fixed-rate mortgages, with jumbo loan balances (greater than $417,000), decreased to its lowest level since December 2012, 3.74 percent, from 3.76 percent, with points decreasing to 0.26 from 0.30 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for 30-year fixed-rate mortgages backed by the Federal Housing Administration (FHA) decreased to its lowest level since April 2015, 3.67 percent, from 3.72 percent, with points increasing to 0.34 from 0.33 (including the origination fee) for 80 percent LTV loans.

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