Wednesday, June 12, 2013

MBA Reports Big Drop in Refinancing

The discordant chatter about tapering QE coming from various Fed officials recently caused mortgage rates to jump above 4% for the first time in more than a year. This has had the immediate effect of depressing mortgage refinancing activity, as reported today by the Mortgage Bankers Association:
The Refinance Index increased 5 percent from the previous week. Despite the increase in the refinance index last week, the level is still 11 percent lower than two weeks prior and 36 percent lower than the recent peak at the beginning of May. The seasonally adjusted Purchase Index increased 5 percent from one week earlier. The unadjusted Purchase Index increased 14 percent compared with the previous week and was 6 percent higher than the same week one year ago. ….

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 4.15 percent, the highest rate since March 2012, from 4.07 percent, with points increasing to 0.48 from 0.35 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

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