Mortgage Applications Up 16.9%

By Liz Clinger Updated on 7/18/2012

With continued decreases to record low mortgage interest rates, mortgage applications overall raised 16.9% for the week ending July 13, 2012.

The refinance index reported by the Mortgage Bankers Association increased 22% week over week, hitting the highest percentage of refinance activity since the middle of June.  Additionally, refinance activity edged up to 80.1% of all mortgage applications, an increase from the prior week’s 77% share, while the adjustable rate mortgage share of applications saw a decline of 4.1%. Seasonally-adjusted purchase index remained consistent, with only a slight decrease in activity of 0.1%.

30-year fixed rate mortgages with a conforming loan limit of $417,500 or under reached an interest rate of 3.74% under last week’s 3.79%, while 30-year jumbo mortgage interest rates decreased to 3.98% under last week’s 4.05% average, a record breaking low. FHA backed 30-year fixed rate mortgage interest rates also sloped to 3.55% under last week’s 3.63%. 15-year fixed rate mortgages also lowered week over week to reach 3.12% under the previous week’s 3.15%. 5/1 adjustable rate mortgages flat lined at 2.71%, maintaining the prior week’s record low.

A statement from Mike Fratantoni, the vice president of research and economics at the Mortgage Bankers Association indicated the sharp increase in refinance activity was due to continued plummeting interest rates, which is effected by the continued and growing concern of the U.S. economy. Fratantoni also noted that HARP refinance applications made up 24% of all refinance activity, keeping the steady pace of the previous recent weeks.