Mortgage applications decrease during holidays
Mortgage bankers did not receive much of a holiday gift from consumers in 2011, since applications for both a home refinance and new home loans decreased during the last two weeks of 2011 even when the statistics are seasonally adjusted, according to the Mortgage Bankers Association (MBA).
The Weekly Mortgage Applications Survey for the weeks ending December 23 and December 30 showed a decline of 1.9 percent in refinancing applications compared to the week ending December 16. However, the share of applications for mortgage refinancing rose to 81.9 percent during that same time period, reflecting a slowdown in home purchase applications.
“Mortgage application activity declined over the last two weeks, even after adjusting for the typical seasonal decline in activity. Refinance applications continue to account for the vast majority of total application volume, with the refinance share reaching its highest level in 2011,” said Michael Fratantoni, MBA’s vice president of research and economics.
Mortgage rates and refinancing
Low mortgage rates are expected to continue at least for the next few weeks of 2012.
According to HSH.com, “We begin 2012 with fixed interest rates almost a full percentage point below where we began 2011, at levels which not only promote affordability and refinance opportunities, but also at ones which are starting to warm up the housing market.”
The average mortgage rate for a 30-year fixed-rate loan was 4.29 percent for the week ending December 30, according to HSH.com, while the average rate for a 15-year fixed-rate loan was 3.60 percent.
Fratantoni anticipates that mortgage rates and the number of mortgage applications will likely stay the same into February.
“As part of legislation to extend the payroll tax holiday, guarantee fees for loans purchased by the GSEs and mortgage insurance premiums for FHA loans will eventually increase,” said Fratantoni. “Given the announced implementation of this change, we do not expect to see an impact on mortgage rates and application activity until at least February.”
If you are considering refinancing a home, it may be a good idea to contact a lender now before loan fees or mortgage rates rise.
