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Home Loan Application Volume Swells Due to Low Rates
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June 15, 2005 LOS ANGELES --
Last week's
home loan market saw a dramatic increase in mortgage
refinancing applicants and was augmented by a record-setting number of
home loan purchase
originations. The surge can be attributed to
interest rates falling to dramatic low points.
According to the Mortgage Bankers Association, a group who
provides analytics for the home loan sector, its seasonally adjusted index of
home loan application
activity rose 17.4 to reach 887.0. This added to a gain of 6.5 percent the prior
week.
The Federal Reserve has stood-fast to its campaign to boost
short term rates, yet long-term rates have remained
historically low. With interest
rates at these historic low levels, its no wonder home buyers and
refinance mortgage seekers see opportunity, and are sprinting
to take advantage of such. Home sales have been catalyzed by the drop in rates,
thus pushing home sales to record levels.
The hard numbers show that last week
<
a href="http://www.californiamortgagerate.com/todays_mortgage_rates.htm">30-year
fixed mortgage rates</a> averaged
5.62, a rise of 7 basis points from 5.55 percent the prior week.
Taking a step backward, we see that, as things stand
currently, home loan interest rates are at a lower level than they were in early
April of this year and furthermore are sitting beneath averages in April as well
as compared to one year ago. In early April the average rate for a 30 year
conventional mortgage was at 5.91 percent, and were at 6.34 one
year ago.-
Article by Ben Pengreen for CMR
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