Historically low mortgage rates, with 30-year fixed-rates remaining close to 3.5 percent, maintained refinance activity near a peak level through the end of 2012. The refinance share of applications rose gradually throughout 2012 to end at the highest level of the year at 82.9 percent of all applications in December. Refinance application demand is largely a function of mortgage rates. However, many borrowers in the past few years had incentive to refinance, but were unable to qualify given the lack of equity in their homes.
The Home Affordable Refinance Program (HARP) allowed borrowers with existing loans backed by Fannie Mae or Freddie Mac to refinance regardless of their current loan-to-value ratio, so long as they had been current on their loan over the past year. FHA runs a similar program to help existing FHA borrowers use a streamline refinance to access current market rates. Together, these programs have led to the highest levels of refinancing activity in some of hardest hit markets.
The home purchase market has also improved over the past year. Compared to last year, the average loan size for purchase applications has been higher across all loan types, indicating widespread growth in home prices. Moreover, the pace of purchase applications has been running about 3 percent above the national level last year.
Despite the surge in refinance activity in 2012, Mortgage Bankers Association expects that refinancing will taper off in the coming months as the economy continues to recover, rates to increase and that purchase applications will continue to increase slowly in 2013 as home price appreciation improves and home sales gather pace. This appreciation is already being realized in Honolulu. As all real estate is local, particular areas of Honolulu have seen list prices increase by 32.13%. Check it out for yourself http://www.exitrealtyhonolulu.com/mimarket/zip/96815/
The above refiance information was provided by Mortgage Bankers Association. To view the entire article, visit http://mba-erm.informz.net/mba-erm/archives/archive_2109111.html