Mortgage Applications At 5-Year High As Rates Fall

DALLAS–A bit of good news for the new year? Declining mortgage rates have pushed mortgage applications in the U.S to a five-year high. The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan rose to 1,245.7, the highest level since 2003.Brian Turner, director of Southwest Corporate Advisory Services, noted, “Interestingly, the MBA’s refinancing measure fell 0.4% to 6,733.8, still the second highest level since December 2007. The average rate on a 30-year fixed-rate loan dropped to 5.14%, the lowest level since records began in 1990. The average on a 15-year, fixed-rate mortgage declined to 4.91%, the lowest since March of 2004.“The drop in mortgage rates has been one of the few bright spots in the mortgage market devastated by record foreclosures and falling home prices,” observed Turner. “Whereas lower rates have stimulated opportunities to reduce monthly payments, they have so far yet to stabilize sales. The MBA purchase index increased to 320.9 last week, from 316.4 the prior week. The measure reached an eight-year low of 248.5 in mid-November and peaked at a record 529.3 in June, 2005.”