At FREEandCLEAR, we follow the Mortgage Bankers’ Association (MBA) mortgage applications index which measures both purchase and refinance applications for mortgage lenders across the country. An increase in the MBA applications index reflects an increase in mortgage applications while a decrease in the index reflects a decline in mortgage applications.
For the week ended December 5th, the composite mortgage application index, which includes both home purchase mortgages and refinancings, increased 7.3%, exactly reversing a 7.3% decline for the prior week. The rebound in the application index was driven by a 13.0% increase in refinance applications, as compared to the prior week, which was down 13%. The purchase component of the index increased 1.0% for the week, down from the 3.0% increase for the prior week. The boost in refinance application activity is likely the result of continued low interest rates. Although interest rates for conforming loans increased to 4.11% as compared to 4.08% for the prior week, rates remain relatively low and existing borrowers are looking to refinance their mortgages before the new year. (Source: Bloomberg)
What it Means for Mortgage Borrowers
The rebound in the refinance index is a positive sign after almost six weeks of flat-to-down refinance application activity. Analysts were hoping for stronger performance from purchase application activity which has been relatively lackluster all year. As we close out 2014 and look to 2015, borrowers may want to take advantage of attractive interest rates. Because this is typically a slower time of year for mortgages, borrowers may experience better customer service and faster closing time from lenders. Check out our Mortgage Refinance Calculator and Mortgage Qualification Calculator to determine if now is the right time for you to refinance your mortgage or buy a new home. Additionally, use our INTEREST RATES feature to keep track of rates and fees for lenders in your area.
The FREEandCLEAR Mortgage Expert