Mortgage applications, a future gauge of home buying, had a sharp jump as more consumers rushed to take advantage of low interest rates, the Mortgage Bankers Association reports.
For the week ending Dec. 2, mortgage applications increased 12.8 percent. Applications for home purchase jumped 8.3 percent from a week earlier while applications for refinancing soared 15.3 percent.
Of the home purchase applications, 85.5% were for fixed-rate 30-year loans for fha and conventional loans. Fha loan was at 3.875% fixed for 30 years with zero points, that is a great interest rate to have and hold for a while.
Now the time to refinance if you have a loan at 4.875% or higher, you will save money on the interest paid on the loan and on your monthly mortgage payment as well.
"Coming out of the Thanksgiving holiday, applications increased significantly as mortgage rates dropped to their lowest levels in about two months," Michael Fratantoni, MBA vice president of research and economics, said in a statement. "In particular, refinance applications increased sharply, with some lenders seeing refinance volume double. Despite this surge, aggregate refinance activity is still below levels reported two weeks ago. Some lenders indicated they are beginning to see an increase in HARP loans, but that increase is still a small portion of the move this week."