Americans continue refinancing their mortgages in massive numbers according to this morning’s Market Composite Index, released by the Mortgage Bankers Association (MBA).
The Market Composite Index, which measures and compares mortgage loan application volume from week to week, showed that for the week ending December 12, mortgage activity jumped 2.9% from the previous week’s numbers. The number of refinance applications posted a 6.5% gain, while purchase applications dipped 4.5%.
According to Bob Walters, chief economist for Quicken Loans, the weekly gains are impressive since they come on the heels of two weeks of strong activity.
“Today’s overall increase in mortgage applications is very impressive, considering we are coming off two of the strongest weeks of mortgage activity in recent memory. Incredibly low fixed-rate mortgage rates, which are currently in the 4 to 5 percent range, are continuing to drive people into the marketplace. Today’s mortgage rates are simply making it worthwhile for many to stop procrastinating and reduce their monthly payments,” Walters said.
“This, paired with the Fed’s commitment yesterday to essentially do everything in its power to ease lending and free liquidity, should have a continued positive impact on activity. With long-term fixed rates remaining so low, there is no reasonable reason for consumers to stay in adjustable-rate mortgages. I think this strong refinancing trend will continue as long as rates remain at current levels.”
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