Refinance Applications Climb as Rates Drop

By:: Kara Johnson | June 30, 2010

Mortgage refinance applications hit their highest level in over a year last week, as interest rates on fixed-rate loans fell to record- or near-record lows, according to figures released today by the Mortgage Bankers Association (MBA).

The average interest rate on 30-year fixed rate loans fell to 4.67 percent last week, down from 4.75 percent the week before and just a few basis points above the survey’s all-time low of 4.61 percent reported for the week ending April 1, 2009. Average points paid, including origination fees, declined to 0.96 from 1.07 the previous week.

The average rate on 15-year fixed-rate loans fell to a new all-time low of 4.06 percent, a new all-time low in the MBA survey, and down from 4.19 percent the week before. Average points declined to 0.97 from 1.00 previously.

In response, applications to refinance existing mortgages rose 12.9 percent last week, hitting their highest point since the week ending May 22, 2009. Over the past four weeks, refinance applications have increased an average of 2.1 percent a week. Even so, refinance activity remains at about half the level it hit following last year’s record lows, according to the MBA.

Meanwhile, applications for mortgages to purchase a home fell for the seventh time in the eight weeks since the April 30 deadline for the federal homebuyer tax credits. Purchase applications were down 3.8 percent for the week, nearly reaching their lowest level in 13 years. Refinances accounted for more than three-quarters of all mortgage applications last week.

The MBA survey is based on 80 percent loan-to-value mortgages and covers about half of all U.S. mortgage applications. The current survey covers the week ending last Friday, June 25, 2010.

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Loan Type	Today	+/-
30 yr fixed	3.72
15 yr fixed	3.03
5/1 ARM	2.75

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