Mortgage applications increased by almost 4% for the week ending May 18—thanks to surging refinancings—according to new figures compiled by the Mortgage Bankers Association.
Overall, refis accounted for 76.6% of all new business, the highest reading since the week of March 2, the trade group reported.
The HARP share of refinance applications was essentially unchanged over the week at 28%. (The comparison is to the week before.)
Lenders reported strong production volumes in the first quarter, a trend that has continued into 2Q. The activity, of course, is being driven by the lowest mortgage rates in decades.
Lenders and brokerage firms are reporting strong interest in HARP refis, but also are complaining about slow turnaround times from wholesalers. But one Orange County, Calif.-based broker cautioned, “In my area, we still have a ton of underwater current jumbo borrowers with no chance of hope.”
MBA noted that the ultra-low mortgage rates come courtesy of the Greek debt crisis. "Continuing negative developments in the sovereign debt crisis in Europe, particularly in Greece and Spain, as well as the recent French elections, which have shifted political power in a manner that will likely show less support for European austerity, helped push the U.S. 10-year Treasury yield below 1.7% last week," said Michael Fratantoni, MBA's vice president of research and economics.
