Mortgage Applications Surge

From Realtor Magazine Online, Daily Real Estate News September 17, 2008

Mortgage applications rose 33.4 percent last week on a seasonally adjusted basis, rising to 661.7 from 496.2 the previous week, according to the Mortgage Bankers Association weekly survey of mortgage activity. Total applications reached their highest level since early May.

On an unadjusted basis, the index rose 65.3 percent compared with the previous week, which was shortened by Labor Day. It was down 1.3 percent compared with the same week a year ago.

Refinances fueled the increase. The Refinance Index increased 88.1 percent while the seasonally adjusted Purchase Index increased only 2.4 percent. The refinance share of mortgage activity increased to 51.6 percent of total applications from 36.3 the previous week.

“Renewed financial concerns should keep long-term Treasury yields low and translate to lower mortgage rates in the near term, despite some widening in mortgage spreads,” says Orawin Velz, MBA’s Associate Vice President of Economic Forecasting in a statement. “We expect to see meaningful increases in mortgage demand in coming weeks on both the purchase and refi sides.”

Mortgage rates fell for the week:

* 30-year fixed-rate mortgages decreased to 5.82 percent from 6.06 percent.
* 15-year fixed-rate mortgages decreased to 5.54 percent from 5.73 percent.
* 1-year ARMs decreased to 6.95 percent from 7.00 percent.

Source: Mortgage Bankers Association (09/17/2008)