On January 13, 2009, the Mortgage Bankers Association (MBA) released its survey for the week ending January 8, 2010.
The average 30-year mortgage during the week ending January 8, 2010 was 5.13%, which was down 0.05% from the rate reported one week earlier. The average 15-year mortgage during the week ending January 8, 2010 was 4.45%, which fell 0.17% from the week earlier survey.
For the week ending January 8, 2010, seasonally adjusted refinance applications jumped 21.8%, and purchase applications rose 0.8% from the prior week according to the survey. The four-week moving averages for purchase applications was down 3.2%, while refinance applications fell 8.0% over the period.
The refinance share of applications rose to 71.5% from 68.2%. Refinance applications tend to be highly sensitive to interest rate levels.
The recent report leaves purchase applications roughly flat over the most recent week, but still 24.9% lower than the same period last year. This is not surprising given that the First-Time Home Buyer Tax Credit was only extended on November 6, 2009, at which time it was also expanded to cover some previous home owners. Nonetheless, we were expecting a fairly sharp drop off in purchase applications because we had expected that it would take several months for new buyers to get in gear to move forward with their home purchase plans.
As we enter the spring buying period, we will likely see more home buyers stepping up to the plate.
Although the rates are about 0.4% higher than the lows of several weeks ago, these low rates still continue to be encouraging for home purchases going forward. However, the idea of potential home buyers postponing purchases while waiting for better rates seems to be a bad bet at this point.
With the Fed planning to stop mortgage purchase operations over the next several months, serious potential home buyers should be thinking about pulling the trigger very soon or risk missing the low rates entirely.
Follow the link to see the full release: http://www.mbaa.org/NewsandMedia/PressCenter/71558.htm
