Rush to refinance nearly doubles mortgage applications
By Bob Willis, Rocky Mountain News (Contact)
Published March 27, 2008 at 12:05 a.m.
The number of mortgage applications filed in the U.S. jumped last week as a drop in borrowing costs caused refinancing to almost double.
The Mortgage Bankers Association's index of applications to buy a home or refinance a loan rose 48 percent to 965.9, the highest level since the first week of February. The group's refinancing gauge surged 82 percent, the most in seven years.
The drop in fixed-mortgage costs is welcome news for Federal Reserve policymakers, who have lowered the benchmark rate six times since September in a bid to ease the credit crisis that followed the collapse in subprime lending.
Still, stricter lending rules indicate that not all applications will be approved.
"Mortgage rates have fallen back, and this is drawing in some home buyers and some homeowners who are looking to refinance," Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report.
"Still, the housing market is not out of the woods yet."
The bankers group's refinancing index increased to 4,255.1 from 2,335.2. The purchase measure rose 10.6 percent to 403.7 from 365 the prior week.
The purchase index reached an almost five-year low of 357.6 in mid-February.
Falling home values leave Americans feeling less wealthy, hurting consumer spending and pushing the economy closer to recession.
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March 27, 2008
11:31 a.m.
Suggest removal
gwats writes:
It is a good sign that those who are still credit worthy are trying to refinance their homes. As we know, there are still a lot of foreclosures and Sub-Prime ARM resets on the horizon. Those who have been foolish or unfortunate are still waiting for a government bailout that will (A) never come or (B) will come long after they have lost their homes to foreclosure.