Low Mortgage Rates Spur Higher Number of Applications
Housing loan applications registered considerable climbs last week, the Mortgage Bankers Association (MBA) reported.
Figures furnished by Freddie Mac had indicated that lower mortgage rates may have fueled the rush as of Jan. 13, but most of the applications received were meant to refinance existing loans, reaching more than 82%.
Compared to the numbers recorded in a week before, total loan applications increased by 23% and total refinancing activities soared as well by 26.4%.
All indicators pointed to the fact that the majority of mortgage applicants had intended not to acquire new houses but to repair their problematic mortgages.
This emerging trend is highlighted by the lower homes sales data reported by the National Association of Realtors, which showed that by November last year, the total number of units sold in the past 12 months only reached 4.4 million.
The benefits of lower rates are more pronounced to greater number of homeowners, especially those servicing adjustable, who were able to save money and avert foreclosures when rates moved down obviously to their advantage.
According to Keith Gumbinger of HSH Associates, those who took the risk before could be reaping the fruits now as adjustable rate mortgages (ARM) plummeted considerably.
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