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Mortgages overall were down slightly for the week ending December 30, according to The Mortgage Bankers Association (MBA), but refinance activity showed healthy gains. Today's MBA Weekly Mortgage Applications Survey indicates the Market Composite Index, which measures mortgage loan application volume, decreased 1.5 percent on a seasonally adjusted basis from one week earlier. Adjustments to the index were made to account for the holiday-shortened week. Although fewer consumers were applying for a loan to purchase a home, many more homeowners were refinancing their current mortgages, as indicated by 8.3 percent rise in the MBA's Refinance Index over the previous week's numbers. "Low long-term interest rates and a healthy labor market continue to lend strength to home sales," says Bob Walters, Chief Economist of Loans, the nation's largest online lender. "Refinance activity will continue as homeowners refinance out of adjustable rate mortgages and into fixed rate programs now that there is virtually no difference between long- and short-term interest rates. We also expect an increase in the number of homeowners tapping their equity to consolidate holiday credit card debt."
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