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Mortgage applications increased a seasonally-adjusted 8.3% compared to the prior week on continued, lower interest rates, the Mortgage Bankers Association announced Wednesday in a statement.Furthermore, the association said refinance applications rose 16.9% during the week ended January 18, 2008 compared to the previous week, and are up 92% since November 2007. Purchase applications are up 7% during the same period. Also, the 4-week moving average for all loan applications increased 13.7% compared with the same period a year ago.
The average interest rate for the 15-year fixed-rate mortgage was 4.96%, down from 5.07%. The 30-year fixed-rate mortgage was 5.49%, down from 5.62%. The rate for a one-year ARM was 5.51%, down from 5.77%.
However, despite the refinance application rise, economist Steve Affinito cautioned against reading too much bullishness into this week's statistics.
"It appears that homeowners are responding to the one-half to three-quarter-point drop in long-term interest rates to refinance, but keep in mind refinance statistics can swing tremendously, season-to-season," Affinito said. "Also, this is one instance where you have to keep in mind the bigger picture regarding housing, which is the roughly 10-month supply of listings [unsold houses, condos] on the market today nationally. That's an enormous inventory that will have to be worked-off before housing prices can begin to recover."
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