Mortgage Applications Surge on Rebound in Refinance Demand
The Mortgage Bankers Association reported Wednesday that applications for US home loans surged last week thanks to a stout increase in demand for refinancing loans that offset a decline in home purchase demand. The group’s seasonally adjusted index of mortgage application activity , which includes both refinancing and purchase loan requests, climbed 6.9 percent in the week that ended on April 13th. The gain was entirely accounted for by refinancing requests, which surged 13.5 percent, more than making up for an 11.2 percent slide in demand for home purchase loans.
Last week’s decline in purchase demand was the second consecutive slide after five straight weeks of gains. The surge in refinancing requests, meanwhile, came as mortgage rates once again approached record lows after climbing sharply in the preceding few weeks. As a result, the percentage of all mortgage applications accounted for by refinancing requests rose bounced back to 75.2 percent from just 70.5 in the week prior. According to a separate report from mortgage insurer Freddie Mac, 30 year fixed-rate mortgages averaged an interest rate of 4.05 percent for the week, down from 4.1 percent the week before.