Mortgage Applications Rise
As a result of the lowest interest rates in decades, home mortgage applications rose 4.9% last week.
According to the Mortgage Bankers Association, the gain was driven by a 5.7% increase in refinancing applications. New loans for purchasing homes rose by less than 1%. .
Refinancing represents 82.4 percent of all new loan activity, its highest level since May 200 and is the highest share of the loan market since January 2009.
Home sales, distressed by continuing high unemployment, minimal job growth, and new strict lending standards have not benefited from the low mortgage rates. Home purchasing is 41.5 percent below where it stood on April 30th when federal tax credits for home buyers expired.
Lending rates have decreased since spring as investors moved to the relative security of Treasury bonds, thus lowering their yield. Home loan rates usually move with Treasury bond yields.
Rates for a 30–year fixed loan dropped to 4.55%, down from 4.6%a week ago. Typical rates for the 15–year fixed–rate mortgage, a popular alternative for refinancing loans, fell to 3.91% from 3.99%.
The Mortgage Bankers Association’s survey represents over half of all mortgage applications nationwide.
