If you are still sitting on the fence, now is the time to make a move towards purchasing the home you have been looking at. If you have good credit now may be the best time to “move” forward.
NEW YORK (Reuters) — Applications for home mortgages jumped to their highest level in a month last week as interest rates were set to their lowest in more than two years, an industry group said Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity rose 32.2% to 706 the week ended Jan. 4, led by refinancings.
It was the highest level of activity since the first week of December. The average 30-year fixed mortgage rate eased 0.32 percentage point to 5.73%, the MBA says.
The 30-year rate was the lowest since 5.72% the week ended Sept. 9, 2005.
Fixed mortgage rates have declined as investors expecting slower economic growth piled into the safety of U.S. Treasury securities, sending yields lower. Bond yields fall as prices rise.
The MBA’s seasonally adjusted index measuring applications to refinance loans fueled the rise, soaring 53.9% to 2,494.2. The MBA’s index of purchase applications increased 14.7% to 414.0.
Refinancings accounted for 57.7% of applications, up from 50.9% in the previous week, the MBA said.
While rising, the indexes likely overstate demand for mortgages because banks have tightened lending standards, which is forcing borrowers to make multiple applications, economists say.
Tighter lending standards following the implosion of risky loans have forced borrowers to pay higher rates, or locked them out of the market.
Copyright 2008 Reuters Limited. Edited for publication.
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