Low rates help mortgage applications boom

July 19th, 2012

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Due to record-low mortgage rates, applications spiked significantly during the week ending July 13, according to the Mortgage Bankers Association. That jump may signify a stabilizing market for transferees.

The Weekly Mortgage Applications Survey from the group showed that the Market Composite Index – which tracks total loan applications – increased 16.9 percent. Much of the demand came from current homeowners, as the Refinance Index improved by more than 20 percent and the Purchase Index was nearly unchanged from one week earlier.

"Refinance application volume increased last week to near peak levels for the year as mortgage rates dropped to a new low, driven down by growing concerns about the health of the U.S. economy," said Mike Fratantoni, MBA's vice president of research and economics.

The MBA added that the total refinance share during the week eclipsed 80 percent, which was a rise from the previous week's figure of 77 percent. Furthermore, only 4.1 percent of total applications involved adjustable-rate mortgages.

Continued improvements in mortgage application volumes, coupled with low rates, show the real estate market as improving. Transferees uncertain how the current market affects them should consult with their mortgage service company.