Mortgage rates have been on a downward spiral for some time, and last week the trend finally appears to have spurred activity. Mortgage applications surged 16.9 percent for the week ending July 13, according to weekly survey data released today by the Mortgage Bankers Association. The growth came from applications for refinances, which jumped 22 percent from the previous week to account for 80.1 percent of all mortgage activity, up from 77 percent. But applications for purchases actually stumbled 0.1 percent.
“Refinance application volume increased last week to near-peak levels for the year as mortgage rates dropped to a new low, driven down by growing concerns about the health of the U.S. economy,” said Mike Fratantoni, the association’s vice president of research and economics. “Applications for HARP refinance loans accounted for 24 percent of refinance activity last week, in line with the HARP share for the past few weeks.”
The average interest rate for 30-year fixed-rate mortgages with conforming balances fell 5 basis points to 3.74 percent, while similar mortgages for jumbo loans decreased to 3.98 percent from 4.05 percent. Federal Housing Administration-backed 30-year fixed-rate loans had an average interest rate of 3.55 percent, down from 3.63 percent. Interest rates for 15-year fixed-rate mortgages fell three-hundredths of a percentage point to 3.12 percent. All four rates are the lowest in the history of the MBA survey. — Adam Fusfeld