Mortgage Applications Jump; Refinance Loans Up 17.4% Due to Low Mortgage Rates
Posted on | September 23, 2009 | No Comments
Mortgage applications jumped last week as mortgage interest rates were at levels not seen since May. The 30 year fixed mortgage rate was around 5% and often below 5% for much of last week. This obviously increased the interest in the housing market as lower mortgage rates save home owners great amounts of money. The Mortgage Bankers Association showed that refinance loans were up 17.4% which is the highest level since May 22nd.
The United States government has worked very hard to keep mortgage interest rates at low levels. The Federal Reserve Bank has been purchasing mortgage backed securities along with US Treasuries. This has greatly helped to keep mortgage rates at or below the 5% level. Low mortgage rates and an $8,000 new home buyers tax credit has done plenty to help stablize the overall housing market. We are not out of the woods yet but it is a good start.
With the tax credit ending November 30th and the Federal Reserve moving away from buying US Treasuries by the end of October we could see a very interesting few months for mortgage interest rates coming up. There is great uncertainity when it comes to the long term outlook for mortgage rates. Some analysts are actually predicting that mortgage rates are going to move much higher in the near future because the Federal Reserve Bank has created artificially low rates.
The Mortgage Bankers Association purchase index was up 5.6%. The four week moving average for mortgage application was up 4.3%. The index of refinancing applications increased the most with a jump of 17.4% which is the highest levels we have seen since the beginning of the summer. It will be interesting to see if low mortgage rates continue to spark a great interest in the overall housing market.
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Author: Jeremy North
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