- Seasonally adjusted purchase index saw a nice 4.3% increase to 267.7 from 256.6 last week.
- Mortgage applications today showed volume dropped over 16%, including an adjustment for the Memorial Day holiday.
- Decline came as refinancing activity plunged over 24% from the previous week, adding to its 18.9% decline from the previous week.
- Refinance share of mortgage activity fell significantly, down to 62.4% from 69.3% of total applications in the previous week.
- Mortgage Bankers Association (MBA) reveled that its market index
- ARM mortgage share activity increased +3.0% from the previous week, when it made up 2.6% of total applications.
- Interest rates increased across the board, with 30-year fixed rate mortgages jumped to 5.25% from 4.81% last week.
- The rates for 15-year fixed rate increased to 4.8% from 4.44%.
- 1 year ARM also rose to 6.61% from 6.55% in the previous week.
- Key element to remember as to why mortgage rates are at historical low rates is the Federal Reserve’s “quantitative easing” measures which have clearly pushed mortgage rates down spurring incased re-finance activity. But the rate reduction have yet to impact purchase activity.
"Prices will continue falling because of foreclosures. Without policy, conditions would be even worse. Mortgage rates are rising again, but the Fed's intention is to keep them low, so it will likely take steps to do so," – Cecilia Chen (Senior Director of housing economics at Moody’s)
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