Mortgage applications increased by almost 16% for the week ending July 15 with interest in refinancings at their highest level of the year, according to new figures compiled by the Mortgage Bankers Association.
The trade group, which tracks activity through a proprietary index, said refi applications accounted for just over 70% of all new business compared to 65.6% the week prior.
"Ongoing turmoil in the financial markets primarily due to the sovereign debt crisis in Europe has brought mortgage rates back to their lowest levels of the year," said Michael Fratantoni, MBA's vice president of research.
Regarding refis, Fratantoni said, “One factor that may be contributing to this increase is that borrowers potentially impacted by impending decreases in the conforming loan limit may be opting to lock in fixed-rate financing now."
Not surprisingly, new applicants are opting for fixed-rate loans with ARMs making up just under 6% of all new applications.
For the week, the average rate offered on a new 30-year fixed rate loan was 4.54%, down slightly from the week prior. Points offered inched down to 0.98 from 0.99. The average rate on a 15-year FRM was 3.66%.
