Last week, mortgage applications saw a sharp increase. Declining rates encouraged aspiring homeowners to take the leap and invest in a personal residence. According to the Mortgage Bankers Association, its application survey data rose by 25.5 percent. This atypical movement ran the gamut since the refinancing index also grew by 24 percent.
It would appear that the amount of purchase and refinance mortgages climbed because of the recent rate volatility. Mortgage experts point out that when purchase and refinance application numbers change either higher or lower, one or the other is usually moving. However, in this case, both financing options are surging by roughly the same numbers.
Borrowers woke up to 30-year conventional rates that are as low as 3.625 percent. This is the first time that rates have been this low since last April. In addition, effective and contract rates dropped on all fixed rate products. Some of them made significant shifts. For instance, average contract rates on mortgages with 30-year terms and conforming loan balances fell to 3.99 percent. The jumbo option of conventional loans with 30-year terms saw interest rates drop to 3.89 percent. For this type of loan, it is the lowest that it has been since April while the average contract rates for FRM backed FHA loans with 30-year terms fell to 3.80 percent. A loan option did increase. The average contract rates on 5/1 ARMs rose from 2.95 percent to 2.96 percent. If you’ve been considering a home purchase or a refinancing option, then now may be the time to apply for one.
