January 23, 2008
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Applications for home mortgages jumped for a third consecutive week as plunging interest rates encouraged more homeowners to seek refinancings, an industry group said Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of refinancing applications surged 16.9% in the week ending Jan. 18 to 4,178.2, the highest level since March 2004. The activity is up 92% since the beginning of November and more than offset a 4.6% fall in the index for home purchase applications to 439.9, it said.
The rise followed a drop in the average 30-year fixed mortgage rate to 5.49% last week from 5.62% in the previous week and 6.18% in mid-December, the trade group said.
"It is clear that borrowers are responding to the 40-80 basis point drop in rates we have seen since Nov. 2 across" mortgage products, said Jay Brinkmann, vice president of research and economics at the MBA.
Tighter lending conditions make it hard to estimate how many of the applications will be successful, he said. Lenders have pulled back on credit to borrowers of all credit histories after soaring delinquencies on subprime loans created billions of dollars in losses. |
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