subject: Should you refinance your house? The MBA says numbers are up! [print this page] Should you refinance your house? The MBA says numbers are up!
In a previous article posted on our website's blog, our staff predicted that the housing market would see an increase in refinance loans before the end of the fiscal year. As it turns out, that bump in refinance loans might be here sooner than expected.
The Mortgage Banker's Association (MBA) announced two weeks ago that there has been a steady rise in refinance applications. A spike of 9.2 percent from the previous week (June 21-25) is the highest the Refinance Index survey has seen since the week of May 10--May 15, 2009, over one year ago.
Additionally, the four week moving average in the Refinance Index bounced up 8.3 percent. The refinance share of mortgage activity increased from 76.8 percent to 78.7 percent over the previous week--the highest refinance share observed from the survey since April 2009.
The increase in refinance applications seems to imply that borrowers are looking for either lower monthly payments or reduced mortgage interest rates. Both can increase a borrower's amount of disposable income, as well as consumer spending. Another viable option is the ability to pay off other debts from credit cards.
On the contrary, a falling number of purchase loan applications imply a decline in home purchases.
The housing market is still looking for balance. Purchase loans rose initially in February, and continued through April, as first time home buyers grabbed at the chance at first time home ownership. Now as the deadline for purchase loan closings has been extended by Congress to September 30th, purchase loans are beginning to slow and refinance loans are beginning to rise.
Many economists predict that we won't see significant growth in the housing market until 2011. Until then, continue to watch mortgage rates and consult a mortgage banking specialist. Consultations with us are always free and our number one goal is to get you the best information possible for your situation.
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