Refinances Up as Mortgage Rates Go Down

Many homeowners are running to their local bank or broker in order to cash in on dropping mortgage rates. Refinance applications rose substantially this week as rates take yet another tumble.

The economy may be making a slow upward turn as mortgage rates continued to fall this week. Mortgage applications were up by 11.9% this week, one of the sharpest inclines over the past eight months. Though applications are down by 10.9% when compared to the same week in 2005, the difference in percentages is the smallest deterioration since April. Refinance applications rose 17.5%, the largest increase for refinances seen in almost a year.

With mortgage rates continuing to drop, refinance applications made up almost 47% of all applications, a significant jump from 44% last week. The past seven weeks have experienced mortgage rates dropping by 30 basis points, making the average 30 year fixed mortgage rate 6.24%; that rate is 57 basis points lower than a June high of 6.81% for the average 30 year fixed mortgage. Applications for home purchases also rose this week, showing a 7.6% increase from last week, when home purchase applications were at a three-year low.\r\n