According to the survey conducted by the Mortgage Bankers Association (MBA), mortgage loans refinancing increased by approximately 2.4%, giving economists an overview of the growing demand of mortgage loans.
The growing trend of increasing mortgage loan refinancing implies that homeowners seek to reduce their monthly mortgage payment and to increase their disposable income through refinancing.
Figures gathered from the Market Composite Index reveals that mortgage loan refinancing application volume increased by 2.7% on a seasonally adjusted basis, while 2.3% on unadjusted basis. The Refinance Index rose by 2.8% compared with the fourth week of August 2010, the highest level since May 1, 2009. The refinance share of mortgage activity also rocketed to 82.9% in total loan applications, the highest refinance share since January 2009.
Meanwhile, the average contract interest rate for 30-year fixed rate mortgage declined by 4.43% with points increasing to 1.34 for 80% loan-to-value (LTV) ration loans, while the average contract interest rate for 15-year fixed-rate mortgages slowed down to 3.88% from 3.91%, with points decreasing to 1.45.
According to Michael Fratantoni, vice president of research and economics of MBA, the drop in mortgage rates manifest weak economic growth and weak housing market.
