Refinancing Boom Amid Falling Mortgage Rates

Refinancing Boom Amid Falling Mortgage Rates
Mortgage applications nearly doubled last week after the Federal Reserve slashed interest rates by 0.75 percent last week.

Refinance mortgage applications increased by 82 percent last week as mortgage rates begun to decline for the first time since February 2008. Home purchase applications also increased last week by 10.6 percent which helped bring the overall mortgage application increase to 48.1 percent.

Over the past two weeks the fixed cost of borrowing dropped 0.63 percentage points, which is the largest drop in over four years. In response homeowners raced to refinance by applying for more mortgages in any one week period since the beginning of 2001.

Mortgage rates have also been declining since the Federal Reserve announced an interest rate cut on March 18. The 30 year fixed rate mortgage is ranging anywhere from 5.75 percent to 5.875 percent, which is also the lowest the 30 year fixed rate mortgage has been since February 2008.

According to the National Association of Realtors existing home sales for the month of February increased for the first time since July of 2007. This could be a sign that the housing industry is beginning to stabilize and home values have hit rock bottom.