Refinancing Surges as Interest Rates Fall

Washington, DC, March 26, 2008—Mortgage applications increased 48.1 percent on a week-to-week basis due to a surge in refinancing applications, according to the Mortgage Bankers Association.

Refinancing applications rose 82.2 percent in the week ended March 21. Filings for purchase mortgages also rose a adjusted 10.6 percent.

Applications were up an unadjusted 41.1 percent from the same week a year ago.The seasonally adjusted four-week moving average for all home loans was up 11.3 percent.

Following the Federal Reserve move last week to help stabilize the mortgage-backed securities market, “we saw an immediate impact with a drop in mortgage rates,” said Jay Brinkmann, MBA’s vice president of research and economics, in a news release.

The 30-year fixed-rate mortgage averaged 5.74 percent last week, down from 5.98 percent a week earlier, the survey said.

The 15-year fixed-rate mortgage barely fell, averaging 5.23 percent last week, down from 5.24 percent. But the average rate on one-year adjustable-rate mortgages rose to 7.02 percent from 6.99 percent.

Refinance applications made up 62.0 percent of all applications last week, up from 49.7 percent the week before.