Substantial Mortgage Loan Activity Continues
Demand for mortgage refinancing jumped last week, with applications increasing a seasonally adjusted 15.3 percent after several weeks of declines, the Mortgage Bankers Association (MBA) announced today.
Despite the highly publicized debut of the new HARP II refinance guidelines for underwater borrowers, HARP applications made up only a small portion of the increase, according to Michael Frantoni, MBA vice president of marketing and research.
Overall mortgage applications were up a seasonally adjusted 12.8 percent from the previous week, including an 8.3 percent rise in purchase applications, which reached their highest level since early August. Purchases currently make up about one-quarter of all mortgage applications, but the rest being for refinancing existing loans. With interest rates remaining historically low, housing affordability statistics (dating back to 1971) have reached record highs this year. Despite this the rental market remains red hot, likely due to the fact that so many previous homeowners that lost their homes to foreclosure and short sales have flooded the market.
So maybe all of this means consumer confidence will start improving given the refinance relief that's on the way along with the fact of the purchase demand starting to increase? We can only hope this is the case because as the real estate market goes, the economy goes.