Home Refinance Activity Continues
The Mortgage Bankers Association (MBA) reported that overall refinance activity for the week ending January 12, 2007 increased 6.3 percent over the week ending January 5. This continues a recent upward trend. The week ending January 5, 20007 saw a 17.3 percent surge in activity. The increase was evidenced by the Market Composite Index, a statistical indicator that tracks mortgage loan applications from week to week.
The ongoing increase occurs as homeowners take advantage of the current low long-term interest rates by refinancing fixed-rate mortgages. Americans are also moving from adjustable rate mortgages (ARMs) to fixed-rate programs to reap the financial benefits of the low long-term rates.
Many observers expect the positive refinance trend to continue, basing favorable economic currents in part on the nearly $400 billion in ARMs scheduled to adjust in 2007.
Actual purchases slowed somewhat, dropping seven percent. This followed a week of double-digit gains. Last week's numbers were somewhat surprising, as December's employment rate soared, and long-term interest rates remained low. Jobs and interest rates are considered major factors guiding decisions to buy or refinance homes.
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