Refinancing Surges as Interest Rates Move Lower

Washington, DC, January 16, 2008 — Refinancing continued to surge last week as overall mortgage activity rose 28.4 percent for the week, according to the Mortgage Bankers Association weekly survey.

The Refinance Index increased 43.4 percent from the previous week, which was shortened by the New Year’s holiday, and the Purchase Index increased 11.4 percent. Refinancing accounted for 62.7 percent of mortgages.

Overall mortgage activity was up 39 percent over the previous year and 91 percent were fixed rate mortgages. Mortgage rates also fell.

The average rate for 30-year fixed-rate mortgages decreased to 5.62 percent from 5.73 percent, with points decreasing to 0.94 from 1.10 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average rate for 15-year fixed-rate mortgages decreased to 5.07 percent from 5.21 percent, with points decreasing to 1.09 from 1.18 (including the origination fee) for 80 percent LTV loans.

The average rate for one-year ARMs decreased to 5.77 percent from 6.04 percent, with points increasing to 1.00 from 0.99 (including the origination fee) for 80 percent LTV loans.