MBA: Refi Is Up But Purchase Demand Hits A 13-Year Low

The [link=]Mortgage Bankers Association[/link] (MBA) reports that applications to refinance home loans jumped to a seven-month high last week, while purchase demand recorded a 13-year low. According to the MBA's Weekly Mortgage Applications Survey for the week ending May 21, the Refinance Index increased 17% percent from the previous week, marking the third consecutive increase recorded in the survey since October 2009. However, the seasonally adjusted Purchase Index decreased 3.3% from one week earlier and is the lowest Purchase Index observed in the survey since April 1997. The unadjusted Purchase Index decreased 4% compared with the previous week – down 27.1% over the past four weeks and 27.5% lower than during the same week in 2009. The refinance share of mortgage activity increased to 72.2% of total applications, from 68.1% the previous week, which is the highest refinance share observed in the survey since December 2009. ‘Refinance application volume jumped last week as continuing financial market turmoil related to the budget crises in Europe extended the opportunity for homeowners to lock in at historically low mortgage rates,’ says Michael Fratantoni, the MBA's vice president of research and economics. ‘In contrast, purchase applications fell further this week, following last week's sharp decline, keeping the purchase index at 13-year lows.’ SOURCE: Mortgage Bankers Association


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