The Real Deal Miami

U.S. refinance activity falls as market responds to turmoil abroad

March 30, 2011 12:15PM

Refinance activity fell by 10.5 percent last week as mortgage rates rose, the Mortgage Bankers Association said today. Purchase activity was also down by 1.5 percent compared to one week earlier. According to Michael Fratantoni, vice president of research and economics for the MBA, the shift came “as global markets calmed following the recent crises in Japan and the Middle East.” The response to the global turmoil resulted in an increase in mortgage interest rates, and indeed, the average contract interest rate for the 30-year mortgage rose to 4.92 percent for the week that ended March 25, up from 4.8 percent in the week prior, and the interest rate for the 15-year mortgage rose to 4.16 percent, up from 4.02 percent one week ago. Fratantoni noted that as rates inch closer to 5 percent, fewer homeowners are able to refinance, while purchase activity is remaining flat despite the beginning of the spring homebuying season. TRD