We are on the third week of August and the volume of mortgage loan applications just keeps on increasing. According to the latest weekly survey by the Mortgage Bankers Association (MBA) ending August 11, 2017, mortgage applications increased 0.1 percent from a week ago.
The Mortgage Application Weekly Survey of the MBA projects into numerical data the dynamic changes that happen in the US mortgage market every week.
It can be recalled in the previous survey, mortgage applications gained 3.0 percent from the week before. The refinancing shares of the mortgage activities also ticked up by almost 50 percent.
This Week’s Highlights
- On the seasonally adjusted basis, mortgage applications increased feebly by 0.1 percent. The volume of applications on the unadjusted basis, however, took a 1 percent drop from a week earlier.
- Also increasing is the refinance Index, up by 2 percent from the previous week.
- Seasonally adjusted Purchase Index decreased 2 percent, while the unadjusted purchase index decreased 3 percent compared to a week earlier.
Refinance Shares of Mortgage Applications Increased Steadily
The Refinance shares have increased for the second consecutive week. It rose to 47.8 percent of the total applications, following the 46.7 percent increase in a week prior. This week’s increase hit record-high since February 2017.
Government-Backed Loan Applications Unchanged, VA’s Share Dropped
The volume of applications submitted to the Veterans Affairs (VA) decreased over a week. From a 10.7 percent a week ago down to 10.5 on the latest survey. Unchanged after a week are the applications shares of the Federal Housing Administration (FHA) at 10.2 percent, and the United States Department of Agriculture (USDA) at 08. Percent.
Low Mortgage Rates Driving Mortgage Applications Up
The low mortgage interest rates may be causing this steady increase in the volume of mortgage applications in August.
For homes with 30-year fixed-rate loans, the average mortgage rate edged down this week. Freddie Mac rates slipped to 3.89 from last week’s 3.90 percent. While the benchmark rate was at 3.43 percent from a year ago, the present rates are still very low considering the forecasts of many financial analysts in the beginning of 2017.
Those who are seeking to refinance their current mortgages, loan rates for 15-year fixed rate mortgages decreased as well. It dropped to 3.16 percent from the 3.18 percent a week ago.
A Perfect Time to Refinance
Now could be the perfect time to refinance your home loan. If you have been wanting to secure a lower interest rate, you should consider refinancing while rates are at their lows.
The rise in interest rates predicted by many housing experts has yet to materialize. There is no guarantee if rates will stay low for the remainder of the year. If you keep on postponing your refinancing plans in the hopes of a much lower rate, you may miss out on a good one.
If you are thinking of refinancing to shorten the loan term, you should do so now. Short-term mortgage interest rates are also decreasing. Not only will you cut the length of your term significantly, you will also be reducing your loan’s interest rate saving you time and money. That’s hitting two birds with one stone.