Thanks to rock-bottom interest rates new mortgage applications spiked by 18% for the week ending June 8 on a sequential basis, according to new figures compiled by the Mortgage Bankers Association.
The trade group, which tracks the market through a proprietary index, said business hasn’t been this good since April 2009.
The new reading is seasonally adjusted. MBA said the unadjusted gain was a mouthwatering 30% when compared to the week prior.
According to interviews conducted by National Mortgage News over the past few weeks, several nonbank lenders are seeing a huge gain in applications. Caliber Funding, for instance, is looking at adding two new loan officer groups from competing firms. “We are really busy right now,” said CEO Brian Simon.
Although the application gain is good news for mortgage bankers everywhere, the business continues to be dominated by refinancings. MBA reported that refis accounted for 79% of all new applications for the week ending June 8 compared to 78% the week before.
“Mortgage application volume increased sharply last week,” said MBA economist Michael Fratantoni. “Refinance volume increased as borrowers were able to lock in at mortgage rates below 4%, and purchase application volume was its highest level in over six months. HARP volume has been steady in recent weeks at about 28% of refinance applications.”
The average size of all loans for home purchase was $243,733 in May 2012, up from $238,135 in April, the trade group reported. The average loan size for a refinancing was $226,576, compared to $219,664 in April.
