Refinance mortgage applications hit a 3-year high

By Stevie Duffin Updated on 8/6/2012

According to several industry trade groups, mortgage applications rose slightly during the week of July 20.  This marked the highest level of the refinance index in 3 years!  Nevertheless, several analysts still viewed these statistics as a lack of prosperity in the lending market.

The refinance index rose 0.8% and mortgage applications rose 0.2% since the past week.  The refinance index was at its highest level since April of 2009.  Despite the fact that refinancing saw a small victory, the refinance index dropped by 6% when regarding government loan applications.  Home purchases fell 2% from the previous report – no doubt a correlation with the falling purchase index. The adjustable-rate share dropped to represent 4.1% of mortgage applications.

Analysts from Capital Economics believe that low mortgage rates aren’t having any effect on mortgage-dependent buyers.  The firm also commented on the fact that the FHFA doesn’t condone principal forgiveness on Fannie or Freddie mortgages.

There was a slight increase for 30-year fixed-rate mortgages with conforming loan balances (from 3.74% to 3.75%).  There was also an increase with average interest rates for the 30 year FRM with a jumbo loan (from 3.99% to 4.01%).

30-year FRM loans backed by FHA have had unchanging contract interest rates (3.52%).  This is the lowest FHA rate recorded in the report’s history.  The 15-year FRM saw growth, growing from 3.09% to 3.07%; the 5/1 ARM’s average contract interest rate also grew from 2.68% to 2.73%.

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