At FREEandCLEAR, we follow the 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. Mortgage application activity for the week ended October 3rd, 2014 increased slightly, reversing the recent flat-to-downward trend in the index .
For the week ended October 3rd, the purchase application index increased 2.0% as compared to the prior week. The refinance application index increased 5.0% as compared to the prior week. The composite index, which includes both purchase and refinance mortgage applications, increased 3.8% as compared to the prior week. The increase in the index is attributed to the recent decline in interest rates, which drives refinancing applications, and signs of improvement in the home sales market, especially the new home segment which has shown strong growth recently. (Source: Bloomberg)
What it Means for Borrowers
The increase in the mortgage application index is a welcome development for mortgage lenders who have experienced a decline in applications over much of 2014. Borrowers appear to be wisely taking advantage of the pullback in interest rates by refinancing their existing mortgages while home buyers may be starting to be pulled into the market by flattening prices and attractive opportunities in the new home market. Homeowners can use the FREEandCLEAR Mortgage Refinance Calculator to determine how much money they can save by refinancing and home buyers can use our Mortgage Qualification Calculator to determine what size mortgage they can afford. Additionally, check out the COMPARE LENDERS feature on FREEandCLEAR to monitor interest rates for lenders in your area and see if they continue their recent downward trend, which is always good news for borrowers.
The FREEandCLEAR Mortgage Expert