Boom in Refinancing As Mortgage Rates Fall

The applications for mortgage refinance continue to climb amidst plunging rates. The Refinance Index compiled by the Mortgage Bankers Association rose by 22% in the week ended January 16th compared to the previous week. In the week ended January 9th, the index gained 66% to reach its highest level since July 2013.

The total share of refinance applications in the volume of mortgage applications reached 74% in the week ended January 16th to get to its highest level since May 2013. It rose from 71% in the week before.

Refinancing fueled the total volume of mortgage applications made during the week ended January 16th. The Market Composite Index climbed up by 14.2% on a seasonally adjusted basis after experiencing an increase of 49.1% in the week before. The total volume of applications rose by 17% on a seasonally unadjusted basis.

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The volume of applications for home purchase loans declined in the week ended January 16th. It experienced a drop of 3% on a seasonally adjusted basis. On a seasonally unadjusted basis, the applications for home purchase loans rose by 3%. The unadjusted Purchase Index not only climbed with 3%. It was 3% higher compared to the same week one year ago.

The chief economist at the MBA, Mike Fratantoni, said that the volume of mortgage applications reached its highest level since July 2013 during the week ended January 16th. He explained that the increase was largely due to the lower mortgage rates, but the reduction of the insurance premiums for FHA loans also played a role. The refinance applications for FHA loans rose by 57% during the week. Despite this, the share of applications for refinancing in the total application volume for FHA loans was lower compared to VA loans and conventional loans. It was 38% compared to 73% and 77% respectively.

Mailynne

Mailynne

Mailynne serves as a content strategist and writer for mortgage.info. She is ahighly task-oriented strategic planner and experienced writer. Over the past 10 years, Mailynne has managedcontent for both large corporations, non-profits and businesses. She specializes in managing digital marketing,branding and web development content. Mailynne has worked with a variety of local, national and international organizations.

Contact: mailynne@mortgage.info
Mailynne

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