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August 18, 2010: Mortgage Applications Increase For The Week Mortgage applications jumped 13 percent last week, although the bulk of the increase was due to refinancing. The 30 year fixed rate mortgage is now at 4.60 percent, versus 5.15 percent last year; and the 15 year fixed rate mortgage is now at 3.99 percent.
While the bulk of the mortgage application increase was due to refinancing, that still bodes well for the real estate market and for the economy overall. For the economy, refinancing will lower the monthly payments and help free up cash for the consumer; hopefully some, if not all, of which will be spent. For the housing market, the lower monthly payment offered by refinancing will help some homeowners avoid default and foreclosure. This, combined with the fact that most people who refinance do not put their homes up for sale in the immediate future, should help lower the inventory of homes available. And then, of course, it becomes a simple supply and demand situation; with prices more likely to stabilize or improve if either supply decreases or demand increases. Lower mortgage rates, and increased mortgage applications may well give us a bit of both.
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