Refinancing Drops as Mortgage Rates Spike Higher

Washington, DC, June 10, 2009--Mortgage application volume last week fell a seasonally adjusted 16.2% compared with the previous week, the Mortgage Bankers Association said Wednesday, as mortgage rates rose sharply.

However, applications were up an unadjusted 14.4% for the week ended May 29 from the comparable week in 2008.

The most recent week-to-week drop in overall mortgage application volumes stemmed from a 24.1% decrease in refinancing activity among homeowners, the data showed. Filings seeking mortgages to purchase homes were up a seasonally adjusted 4.3%.

Refinancings made up 62.4% of all mortgage applications last week, down from 69.3% the previous week.

Interest rates charged on 30-year fixed-rate mortgages averaged 5.25% last week, up from 4.81% the previous week -- the largest week-to-week jump since October.

The average rate on 15-year fixed-rate mortgages came to 4.8% last week, up from 4.44% the week before, with points decreasing to 1.10 from 1.16.