As Rates Stay Low, Mortgage Applications Jump

In its weekly report for the week ending Oct. 2nd, released today, the Mortgage Bankers Association (MBA) said that their Market Composite Index (MCI), which is a measure of mortgage loan application volume, increased 16.4 percent on a seasonally adjusted basis from one week earlier. Sans adjustment, the MCI an unadjusted basis, the Index also increased 16.4 percent compared with the week over week,

The MBA's Mortgage Refinance Index leaped 18.2 percent from the previous week, following the third consecutive week with sub-5.0 30-year fixed mortgage rates. At the same time, the MBA's seasonally adjusted Purchase Index increased 13.2 percent week-over-week, which is its highest level since January. The unadjusted Purchase Index increased 12.9 percent week-over-week.

It is questionable whether all this interest is strictly due to lower mortgage interest rates. The federal government's $8,000 tax credit for first-time home buyers, which is part of the stimulus bill, has certainly helped. Additionally, that tax credit is set to expire on November 30th, which may cause a frenzy as that date approaches.

It's interesting, however, that this jump in mortage refinancing is taking place in a time of poor job news. The U.S. Labor Department last week said the unemployment rate reached a 26-year high of 9.8 percent in September.

Read a few of our latest mortgage-related stories:

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