Number of Mortgage Applications Continue to Increase

Number of Mortgage Applications Continue to Increase

As mortgage rates continue to drop, the number of mortgage applications increases. How long will this trend continue?

With the record low mortgage rates available to consumers these days, there has been quite a surge in mortgage applications arriving in the offices of banks and mortgage lenders in recent months. According to the Mortgage Bankers Association, the number of mortgage applications has actually increased by about seven percent. Even with that surge, however, the number of applicants is still below the numbers from the first part of last year. Currently, the average mortgage rate for a 30-year fixed rate loan has dropped to an unbelievable 4.58 percent. That’s the lowest rate recorded since Freddie Mac began keeping track in 1971.

Applications for new mortgages were not the only number that increased last week, though. There was a nine percent jump in the number of applications for existing homeowners to refinance their homes. That’s the highest number of refinancing applications since mid-2009. One number that fell, however, was the number of new mortgages that were taken out. That dropped two percent.

One of the reasons that the mortgage rates continue to fall is due to the anxiety and nervousness surrounding Europe’s financial situation. The overall global economy is also making the Feds nervous as rocky and shaky as it is right now. As a result, investors have been shifting large amounts of money into Treasury bonds, which are safer than their normal investments. This has caused yields on the bonds to fall and the long-term fixed mortgage rates typically reflect that drop.

In all, nearly 80 percent of the total applications last week were homeowners applying for refinancing. That’s the highest it’s been since April of 2009.

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