More borrowers submitted mortgage applications to refinance their homes last week, even though mortgage rates barely budged during the week.
Mortgage applications rose 2.4 percent on a seasonally adjusted basis, mostly driven by a 4 percent increase in applications for refinancings, the Mortgage Bankers Association reported in its weekly mortgage market survey, which measured loan volume for the week ending July 18.
Refinance applications made up 54.4 percent of total mortgage activity during the week, the highest level since March of this year. However, refinance applications are still down more than 40 percent from year ago levels. Fewer home owners have been refinancing their homes since mortgage rates jumped a full percentage point in the spring of 2013.
But mortgage rates have been holding mostly steady in recent weeks and continue to be low by historical standards. The MBA reported that the average 30-year fixed-rate mortgage for the week was unchanged from the prior week at 4.33 percent.
“Consumers took action on the lowest mortgage rates we’ve seen since the beginning of 2013,” Bill Banfield, Quicken Loans vice president, told HousingWire. “The jump in application volume is a welcome change after a few sluggish weeks of mortgage activity.”
Meanwhile, mortgage applications for home purchases, viewed as a leading indicator of future home sale, was up just 0.3 percent for the week, the MBA reported. Purchase applications are down 15 percent from a year ago.
Source: “Mortgage Applications Rise, But All on Refis,” CNBC (July 23, 2014) and “Mortgage Applications Rise 2.4% as Roller Coaster Continues,” HousingWire (July 23, 2014)