Weekly Mortgage Applications Jump 23%

(Dow Jones) - The number of mortgage applications filed in the US last week jumped 23 percent from the prior week, the Mortgage Bankers Association (MBA) said Wednesday, as a surge in refinance applications drove new loans.

Refinance activity climbed 26 percent, its highest level since August, according to the MBA's weekly survey, which covers more than three-quarters of all US retail residential mortgage applications. Purchasing rose by a seasonally-adjusted 10 percent during the week ended Friday.

Interest rates reached new lows near the end of 2011, but the flow of new mortgages has varied from week to week.

MBA vice president Michael Fratantoni said ongoing worries about the economic situation in Europe continued to push down US interest rates last week.

"With mortgage rates reaching new lows, refinance volume jumped," Fratantoni said. "Purchase activity also increased as buyers returned to the market after the holiday season."

The four-week moving average for all mortgage applications is up six percent, mostly due to last week's volume jump.

The share of applications filed to refinance an existing mortgage increased to 82.2 percent of total applications, from 80.8 percent the previous week, the highest level since October 2010.
Adjustable-rate mortgages made up 5.6 percent of activity last week, up from 5.4 percent a week earlier.

The average rate on 30-year fixed-rate mortgages with conforming loan balances dropped to 4.06 percent from 4.11 percent, while rates on similar mortgages with jumbo loan balances increased to 4.4 percent from 4.34 percent. The average rate on FHA-backed 30-year fixed-rate mortgages slipped to 3.91 percent from 3.96 percent.

Read more: http://www.myfoxla.com/dpps/money/weekly-mortgage-applications-jump-23-dpgonc-km-20120118_17158199#ixzz1jpjc1EeE

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