Interest rates are holding spurring homeowners to take action. As we all know in recent months we have seen historically low interest rates. Homeowners throughout San Diego are taking action and refinancing their homes. In the wake of today’s Fed meeting, I have so far received five (5) requests for refinance, and two (2) for new purchase loans. I have several clients here in San Marcos and Carlsbad that have been waiting to see what may happen with rates. Now that the Fed has said “they will hold rates, they are taking action. Here is a snapshot that I pulled from a news source today that outlines what we are seeing.
The Mortgage Bankers Association today released the Weekly Survey on Mortgage Application Activity for the week ending December 11, 2009.
The survey covers over 50 percent of all US residential mortgage loan applications taken by mortgage bankers, commercial banks, and thrifts. The data gives economists a look into consumer demand for mortgage loans. A rising trend of mortgage applications indicates an increase in home buying interest, a positive for the housing industry and economy as a whole. Furthermore, in a low mortgage rate environment, such a trend implies consumers are seeking out lower monthly payments which can result in increased disposable income and therefore more money to spend on discretionary items or to pay down other debt.
In last week’s release, new loan application activity indicated an increase in demand for new mortgage loans, likely because the week before had been shorted by the Thanksgiving holiday. The Market Composite Index rose 8.5 percent, the purchase index for 4.0% higher, and the refinance index jumped 11.1%. The refinance share of all applications was 74.4 percent, up from 72.1% the week before. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.88 percent from 4.79 percent with points, including the origination fee, increasing to 1.17 from 1.0 for 80 percent loan to value (LTV) ratio loans.
In the most recent release, new loan application activity increased 0.3 percent on a seasonally adjusted basis from the week ending December 4. The Refinance Index increased 0.9 percent while the Purchase Index decreased 3.6 percent from a week earlier. On an unadjusted basis the Market Composite Index was 0.3 percent lower than the previous week. The refinance share of mortgage activity increased to 75.2 percent of all applications from 74.4 percent a week earlier. This is the highest market share for refinances since the week ended April 24, 2009. The average contract interest rate for a 30-year fixed-rate mortgage increased to 4.92 percent from 4.88 percent with points, including the origination fee, decreasing to 1.08 from 1.17 for 80 percent loan to value (LTV) ratio loans.