Mortgage Refinancing Applications Surge as Interest Rates Stay Low

NEW YORK, Sept 23 Applications for US home mortgages rose last week as both purchase and refinancing applications climbed, an industry group said on Wednesday.

The refinancing portion of mortgage applications soared 18 percent, while applications for the purchase of a home increased a solid 9 percent from one week earlier to its highest level since June 2015.

Last week, the Federal Reserve chose to hold its benchmark rate of interest at a level that is near zero.

The share of refinance of the total activity for mortgages increased to 58.3% of the application from 56.3% the prior week.

In the ARM arena, 5 year loans are published at 3.04% at PHH Mortgage with a starting April of 3.194% which will change as interest rates adjust.

Applications for refinances increased 18%, while applications for purchases jumped a remarkable 9%.

Separately, the Federal Financial Institutions Examination Council (FFIEC) announced the availability of data on last year’s mortgage lending transactions at 7,062 USA financial institutions covered by the Home Mortgage Disclosure Act (HMDA).

Adjustable rate mortgage loans accounted for 6.9% of all applications, up slightly from 6.8% in the prior week. According to this report, the total number of originated loans of all types and purposes declined in 2014 on a year-over-year basis by about 2.7 million, or 31 percent, while refinance originations declined by 55 percent. The effective rate decreased from last week. The 30-year fixed rate has remained below 4 percent for more than two months.

WHAT I SEE: From rate sheets hitting my desk that are not part of Freddie Mac’s survey: Locally, well qualified borrowers can get the following loans for one point: 15-year fixed at 2.625 percent, 30-year fixed at 3.5 percent. The effective rate increased from last week.

The survey covers over 75 percent of all USA retail residential mortgage applications, and has been conducted weekly since 1990. Just 10 percent of respondents predict that mortgage rates will rise in the next seven days. The shorter term 15 year loan interest rates are 3.25% today yielding an April of 3.431%.