Refi Mortgage Applications Up - Part 1

December 27, 2007

With mortgage interest rates remaining at historically low levels, and even declining recently, more mortgage applications are coming in from home buyers and those who want to refinance their existing mortgage. An increasing number of consumers are seeing today’s market conditions as a "window of opportunity" for applying for a mortgage that meets their current needs.

"Reports of weaker consumer spending and a decline in manufacturing activity is keeping mortgage interest rates at bay," said Frank Nothaft, chief economist for Freddie Mac, a major buyer of mortgages. "Rates for long-term mortgages are little changed while rates for ARMs lowered following the Federal Reserve’s latest interest-rate cut. With mortgage rates remaining low, about 38 percent of applications are for refinance transactions. During the third quarter of this year, about 87 percent of refinanced loans were for loan amounts that were 5 percent or more higher than the original balances."

Also, Freddie Mac estimates that families withdrew about $60 billion in home equity over the third quarter, down from about $81 billion during the second quarter.

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