Refinance Activity Continues to Plunge
Freddie Mac's weekly survey posted the average 30 Year Fixed Rate Mortgage at 6.28% for the week. That is a 4 basis point increase over the prior week. As long as the rate stays over 6% we are likely to see soft demand for refinance activity.
MBA reported declines in the key weekly mortgage application surveys:
The Purchase Index fell 5%, from 410 to 390.
The Refinance Index dropped another 15%, from 3,238 to 2,757.
Refinance Application activity is now down to a 53.4% share of all applications submitted.
MBA also reduced it's forecast for Refinance originations in 2004, from $833 million to $430 million. The forecast for 2003 is a remarkable $2.1 trillion.
The most significant factor pushing rates up was the renewed optimism that the economy may be heating up. That changed the investment strategies of institutional investors. The 10-Year Treasury bond rate has jumped 134 points since mid-June and the 30 year FRM has followed suit.
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