Mortgage rates hit new lows
Baltimore Business Journal - by Ed Duggan Contributor
Mortgage rates not seen since the 1950s have sparked a tsunami of applications for refinancing as well as a slight uptick in new purchase loans, according to the latest weekly survey from the Mortgage Bankers Association.
Data indicates that 78.5 percent of applications were for refinancing, up from the already elevated 72.9 percent of the preceding week.
Orawin Velz, associate vice president of economic forecasting for the MBA, said in a news release that the rate drops followed the Federal Reserve's announcement of the U.S. Treasury bond and mortgage-backed securities purchase programs.
The drop offered a "sizable refinance incentive" for most homeowners and sparked the pickup in refinance activity, Velz said.
Total activity was up 31.4 percent from the previous week and up 18 percent from the same week a year ago.
Based upon an 80 percent loan-to-value ratio, average 30-year fixed rate mortgages dipped to 4.63 percent from 4.89 percent in the prior week. Points decreased to 1.13 from 1.23, including the origination fee.
That rate is the lowest since the MBA began its weekly surveys in 1990 and the data covers approximately 50 percent of all retail mortgage applications made by mortgage bankers, commercial banks and thrifts.
The 15-year, fixed-rate mortgage dropped as well to 4.48 percent from 4.89 percent in the prior week. Points were down to 1.07 from 1.18, as all fixed rate plans continued to decline.
The out-of-favor, one-year adjustable-rate mortgage rate increased to 6.22 percent from 6.20 percent in the previous week. ARM applications made up only 1.4 percent of the applications, down from 2 percent in the prior week.
The four-week moving average of activity - a longer-range view of what's happening in the mortgage market - was up 13.9 percent overall, with new purchase activity up 1.7 percent and refinancing up 18.7 percent.
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