Mortgage refinance demand took a big jump last week, approaching
its highest levels of the year as rates continued to fall to new
Applications to refinance a mortgage rose by 22 percent last
week, according to figures released today by the Mortgage Bankers
Association (MBA). Nearly one-quarter of them were for refinancing
through the federal HARP program for low- and negative equity
mortgages, according to the MBA economist Mike Fratantoni, roughly
the same proportion as in previous weeks.
Meanwhile, applications for home purchase mortgages remained
largely flat, declining a seasonally adjusted 0.1 percent from the
week before, but down 3 percent from the same week one year
Just over 80 percent of all mortgage applications last week were
for refinancing, up from 77 percent the week before.
Rates hit new record lows
The spurt in refinance applications came as mortgage rates
dropped to their lowest levels ever reported in the history of the
MBA survey. Average interest rates on conforming 30-year fixed-rate
mortgages fell to 3.74 percent, down from 3.79 percent the week
before, while 15-year mortgages dropped to an average of 3.12
percent, down from 3.15 percent the week before.
On other major loan types, average interest rates on 30-year
fixed-rate FHA mortgages fell to 3.55 percent, down from 3.63
percent the week before, while average rates on 30-year jumbo
mortgages (balances above $417,500) dropped to 3.98 percent, down
from 4.05 percent the previous week.
All interest rates are based on an 80 percent loan-to-value
ratio and are all-time record lows for the MBA weekly survey.
Biggest gains in mid-South
The biggest increases in both refinance and purchase demand
during the month of June were seen in the West South Central region
of the U.S., which posted increases of 63.7 percent in refinancing
and 22.0 percent in purchase mortgage applications during the
month. The region consists of Texas, Oklahoma, Louisiana and
The smallest increase in refinance demand during June was in the
Pacific region, which still showed a monthly gain of 30.9 percent,
while the smallest rise in mortgages for home purchases was in New
England, which saw a 9.3 percent rise in purchase applications in
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