In the wake of all-time record low mortgage interest rates, the number of mortgage applications rose to the highest level in over tthree years, according to data from the Mortgage Bankers Association.
During the week ended June 8, the MBA’s home loan application index, a measure of total application volume, jumped up 18 percent on a seasonally adjusted basis from the previous week. That’s the highest point since May 2009.
The Association’s refinance index grew 19 percent to another high not seen since April 2009. The home purchase index also saw substantial growth, increasing by 13 percent on a seasonally adjusted basis.
Yet even though more consumers sough to buy home last week, refinance requests still make up the lions’ share of the volume. Refinance applications made up 79 percent of all mortgage activity last week, up ever so slightly from 78 percent a week earlier.
“Mortgage application volume increased sharply last week. The increase was accentuated due to the comparison to the week including Memorial Day, but the level of refinance and total market activity is the highest since the spring of 2009,” said Michael Fratantoni, MBA’s Vice President of Research and Economics in a statement. “Refinance volume increased as borrowers were able to lock in at mortgage rates below 4 percent, and purchase application volume was its highest level in over six months.”
According to mortgage finance company Freddie Mac, during that same week long-term interest rates fell to a new low. The average rate on a 30-year fixed rate mortgage plunged to 3.67 percent, excluding fees, a rate unheard of in the roughly 40-year history of the Freddie Mac survey.
With rates so close to three-and-a-half percent, it is no wonder homeowners and potential buyers rushed to the lender tables in such large numbers to take advantage of once-in-a-lifetime low interest rates.