Homeowners are taking a good advantage of the lower interest rates, rushing to refinance their mortgages before rates turn higher again.
According to the Mortgage Bankers Association’s seasonally adjusted index, the total mortgage application volume has increased 2.4% in the last week from the previous week and was up by 15% from a year earlier.
Refinances drove the numbers, jumping 8% for the week to the highest pace in a month and 31% annually.
Refinance volume has been highly rate-sensitive each week of late. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) has decreased to 4.33% from 4.40%, with points increasing to 0.43 from 0.40 for loans with a 20% down payment.
Applications for mortgage to purchase a home did not react as positively. Although they were 7% higher than a year ago, they were down by 2% for the week.
This spring, home sales have been disappointing. The latest read from the National Association of Realtors highlighted an unexpected drop in April sales (down over 4% annually). Closed sales represented that buyers were signing contracts in March, when rates were also quite low.
