WASHINGTON (10/23/14)--Low-interest rates have stirred up mortgage application activity, but only refinances have benefited so far, posting a 23.3% surge for the week ending Oct. 17, while purchase activity dropped by nearly 5%, according to the Mortgage Bankers Association's (MBA) weekly mortgage applications survey (Economy.com Oct. 22).
The jump in refinance applications for the week pushed the overall composite index for the survey up by 11.6%.
"Any time the rates fall in this range, people often find they are in the money, meaning they can save quite a bit by refinancing," Bob Walters, chief economist for Quicken Loans, told the Washington Post (Oct. 17).
Purchase applications have climbed 1.7% over the last month, but remain 3.6% below levels seen at this time last year. The overall purchase index is stuck at 167.7, which is only just above its cyclical low, according to Moody's.
As for interest rates, the contract rate for 30-year fixed-rate mortgages dropped by 10 basis points for the week to 4.1%. Several other agencies that track and report rates have said mortgage rates have even fallen below 4%.
MBA's 30-year mortgage rate sits 29 basis points lower than where it was four weeks ago and 29 lower year-over-year.
Jumbo mortgage rates dropped by 11 basis points to 4.03%, according to the MBA, and the five-year adjustable-rate mortgage rate fell to 2.94%.