• 
  Like
• 
  Follow

Search news    

---

Drop in refinancing leads to lower mortgage activity

December 27, 2010 - Demand for purchase mortgages from those moving into new homes declined last week, but it was a drop in refinancing that led to lower mortgage volume.

The Mortgage Bankers Association reported that for the week ending December 17, purchase applications decreased 2.5 percent from the previous week on a seasonally adjusted basis. Demand for refinance applications plummeted 24.6 percent from the previous week, making it the sixth consecutive week where refinancing volume fell. Total mortgage volume was down 18.6 percent from the week before, said the report.

Steady drops in refinance activity have pushed its share of total mortgage activity to 72.3 percent, down from 76.7 percent a week earlier and well below levels from this summer. Experts say fewer homeowners are refinancing their mortgages now that interest rates are rising.

"Refinance application volume dropped sharply this week as mortgage rates held near six month highs," said Michael Fratantoni, MBA's vice president of research and economics. "Purchase applications fell for a second week, with the level of applications little changed over the past month."

Despite lower mortgage volume, analysts say buyers will resume their moving plans the rest of this year and into 2011. Fannie Mae predicts home sales to increase by more than 4 percent next year and 11 percent by 2012.
 

Recent Articles

Related Categories