Refinancing Level at Three Year High on Record Low Rates

Record low interest rates prompted arnsurge in mortgage applications during the week ended September 28.  The Mortgage Bankers Association (MBA) saidrnthat its Market Composite Index, a measure of application volume, had thernlargest single week increase in more than three years, rising 16.6 percent on arnseasonally adjusted basis from the week ended September 21.  On an unadjusted basis the Index was up 17rnpercent.</p

Refinancing applications drove thernIndex.  The Refinancing Index was up 20rnpercent to the highest level recorded in the MBA’s Weekly Applications Surveyrnsince April 2009.  Eighty-three percentrnof all mortgage applications were for refinancing compared to 81 percent thernprevious week.  HARP refinancing as arnshare of all refinancing applications decreased to 23rnpercent last week from 26 percent the prior week.</p

The seasonally adjusted and thernunadjusted Purchase Indices were both up 4 percent from the previous week.  The unadjusted Index was 11 percent higherrnthan during the same week in 2011.   </p

“Refinancernapplication volume jumped to the highest level in more than three years lastrnweek as each of the five mortgage rates in MBA’s survey dropped to new recordrnlows in the survey,” said Mike Fratantoni, MBA’s Vice President of Research andrnEconomics. “Financial markets continue to adjust to QE3, as the ongoing presencernof the Federal Reserve as a significant buyer of mortgage-backed securitiesrnapplies downward pressure on rates.  Although there was a slight declinernin the HARP share of refinance activity, the level of HARP volume remainsrnsteady.”</p

Purchase Index vs 30 Yr Fixed</b</p