Home Loan Application Volume Swells Due to Low Rates

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 Home Finance.

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