New loan applications increased by just over 6% for the week ending Dec. 7 with refinancings topping 84% of all new business, the highest reading since January 2009, according to new figures compiled by the Mortgage Bankers Association.
Many lenders have been reporting strong volumes the past few weeks. “We just crested over $350 million last month and exceeded $900million in the third quarter,” Paul Rozo of PRMG Mortgage told National Mortgage News.
“Continued uncertainty due to the lack of resolution regarding the fiscal cliff led interest rates lower last week, with mortgage rates reaching a new low in our survey,” said Mike Fratantoni, MBA’s vice president of research and economics.
The trade group tracks the market through a proprietary index and claims its survey reaches 75% of retail funders.
MBA’s Refinance Index increased 8% from the previous week, while the seasonally adjusted Purchase Index moved up 1%.
The average contract rate for a 30-year fixed-rate mortgage with conforming loan balances ($417,500 or less) declined by five basis point from the previous week to 3.47%. Last week’s average rate had tied the all-time low.
The average contract interest rate for a 30-year FHA-insured loans fell two basis points to 3.32%, also a new all-time low.