Applications Almost Flat But Refis Increase, Rates at New Lows

Residential loan applications fell 0.2% for the week ending Sept. 14 as refinancings once again picked up market share thanks to record low rates.

According to figures compiled by the Mortgage Bankers Association, refinancings accounted for 81% of all new business. Roughly 22% of that came in the form of HARP refis on Fannie Mae and Freddie Mac loans.  

The week prior the refi ratio was at 80%.

The trade group said the average contract rate on a 30-year mortgage fell to a new survey low, 3.72%. The average rate on a 30-year FHA loan was 3.50%.  

Wednesday morning the yield on the benchmark 10-year Treasury bond started the day at 1.79% compared to a 52-week low of 1.39%

Although application volumes were down a tick, mortgage originators continue to report strong production figures with some firms expecting a record year for production. Union Bank, San Francisco, for instance, is on track to fund $9 billion in home mortgages this year, a 29% improvement over 2011.

One New England-based lender, requesting his name not be used, said his firm has been hiring new retail loan officers of late, including some from Wells Fargo & Co., the nation’s largest originator.

For the week ending Sept. 7, new applications spiked 11%, which MBA attributed to an extra day of online rate shopping given to consumers courtesy of the holiday weekend.