The Mortgage Bankers Association noted some good news and some bad news in their weekly report about the housing market on Wednesday. For one, there was a surge in mortgage applications last week. Loan application volume rose 8.5 percent from Thanksgiving week 2009 on a seasonally adjusted basis. However, the current mortgage rates rose, as well.
According to the Mortgage Bankers Association (MBA), this ends a six-week run of declining 30-year fixed mortgage rates. For 30-year fixed rates, the average interest rate rose to 4.88 percent from 4.79 percent the prior week. In addition, points increased to 1.17 from 1.00.
At the same time, 15-year fixed-rate mortgages also increased. In that case, it rose from 4.27 percent to 4.33 percent. Points dropped from 1.33 percent to 1.02 percent.
For one year adjustable-rate mortgages (ARMs), mortgage rates decreased from 6.56 percent to 6.55 percent. Points rose to 0.38 percent from 0.34 percent.
Points are prepaid interest often assessed on mortgages. There are point-free mortgages, however.
In terms of mortgage applications, the MBA believes that the rise in applications were a result of interest in refinancing. The MBA’s Refinance Index jumped 11% from the prior week. Meanwhile, the Purchase Index was up 4%. The MBA noted that demand for government-backed loans from the Federal Housing Administration and other federal agencies were the main drivers in the applications.
Written by Michael Santo
HULIQ.com
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