Mortgage Applications Up 18%

By Liz Clinger Updated on 6/13/2012

According to an industry trade group, mortgage applications reached an 18% increase in the week ending June 8 over the prior week, which is not surprising as record low interest rates sweep the nation at under 4%.

Reaching its highest level since April 2009, the refinance index reported by the MBA reached an incline of over 19% over the prior week, while the seasonally adjusted purchase index also reached its highest level in over 6 month, at a 13% incline over the week prior.

Michael Fratantoni, the vice president of research and economics at the Mortgage Bankers Association made a statement on the increasing volume of mortgage applications, and indicated that in part, the surge was due to increased refinance volume as rates were locked in by borrowers to keep under the historically low rates under 4%, and that HARP applications have been making up about 28% of all refinance applications over recent weeks.

From total mortgage application volume, the share of refinance activity rose 1%, reaching 79% of all mortgage applications over the previous week’s 78% share.

Both home purchase loans and refinance loans reached overall size increases in the U.S., with purchase loans growing from April’s average of $238,135 to $243,733 in May, and refinance growing from an average of $219,664 in April to $226,576 in May.

Mortgage interest rate averages went up and down depending on loan programs, with the average interest rate on a 30-year fixed rate mortgage with a jumbo loan balance decreased from 4.13% to 4.12% while FHA backed fixed rate mortgages increased in average interest rate, reaching 3.71% over 3.70%. 15-year fixed rate mortgage average interest rates showed an increase, reaching 3.23% over 3.20% and the average contract rate for 5/1 ARM’s stayed a steady course, unchanged at 2.78%.

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