For the past couple weeks or so mortgage rates have held relatively steady. Most pricing about 5.0% with rates dropping as low as 4.75% here or there (30yr fixed mortgage).
This morning (2/3/10), the Mortgage Bankers Association released their weekly Mortgage Applications Index. The survey covers over 50% of all residential mortgage applications taken by banks thoughout the US. The point of the survey is to display consumer demand for mortgage loans. Obviously, if inital applications were to rise, it would point to an increase in home buying interest, a key component not only to the housing market, but the economy as a whole as well. There is a trickle down effect. As home sales % go up, more jobs are created to build, more items are purchased to fill the home etc. etc.
Last week the news was the exact opposite of this week. Relatively grim outlook with Mortgage apps dropping 10.9%. The Refinance Index fell 15.1% while the Purchase Applications Index moved 3.3% lower.
However! This morning the MBA told us that mortgage applications bounced back in the most recent week and total apps were up 21.0% week over week. Home pruchases were 10.3% higher and refinances were 26.3% higher.
Why the jump you ask? I beleive it is for two reasons. 1. The holidays are over and the first time home buyers are beginning to see the light at the end of the tunnel (in regards to the government home buyer stimulus). REMEMBER you need to be under contract by April 30, 2010!! and 2. The people that missed out on the 4.5%-4.75% rates last year and have been waiting for them to drop back down are seeing the same light at the end of the tunnel (this goverment stimulus - Govt buying MBS Bonds however, expires at quarter 1's end).
SOOO...there is a very real possibility that today's rates could end up being the lowest rates offered in 2010!! Unless of course Uncle Sam wants to open up their wallet and contiue to purchase in the MBS market or offer to extend the home purchase stimulus --BothH of which I find hard to believe.
If you have been waiting to refinance or to buy,
get out there and start the process before you miss the boat of sub 5% rates!
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