Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Mortgage applications jump 17% on lower rates

Interest rate declines spark a spike in mortgage borrowing.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Les Christie, CNNMoney.com staff writer

Should banks be required to make more loans with money from the $700 billion bailout?
  • Yes
  • No
Mortgage Rates
30 yr fixed 3.87%
15 yr fixed 3.17%
5/1 ARM 3.59%
30 yr refi 3.90%
15 yr refi 3.16%

Find personalized rates:
 

Rates provided by Bankrate.com.

NEW YORK (CNNMoney.com) -- Borrowers streamed back into the mortgage market last week as loan applications jumped nearly 17%, according to a regular survey from the Mortgage Bankers Association.

"Rates were going down last week," said Keith Gumbinger of HSH Associates, a publisher of mortgage information. "There were people, especially homeowners wanting to refinance, waiting to pull the trigger. And as soon as the number went down, they did."

Rates for a 30-year, fixed-rate mortgage fell to 6.06% from 6.46% the week before, according to mortgage giant Freddie Mac (FRE, Fortune 500).

The MBA reported that refinancings accounted 46.9% of all applications, up from 42.6% the week before.

Gumbinger also cited pent-up demand for loans as a factor in driving up applications. That could have carried over from the week ended October 17 when applications dropped nearly 17%, an almost mirror image of last week's rise.

At that time, Freddie reported that rates were near 6.5% - the highest they'd been since August. Many potential borrowers thought that was just too high and decided to wait, according to Orawin Velz, Associate Vice President of Economic Forecasting in the Research and Economics group for the MBA.

But when they fell last week, borrowers pounced.

"They didn't want to miss the chance at the lower rates," said Velz.

Applications were still 30% lower than for the same week a year ago, and Velz said it's unlikely that the jump in mortgage applications indicates any kind of upturn in the housing market, which is still seeing record home price drops.

"I don't believe it's a sign of a rising housing market yet," she said. "Application activity is just very volatile from week to week."  To top of page

Find mortgage rates in your area


Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
8 cool things cars of the future will do The coolest features that tease the future of driving, from windshield projections to never needing to park again. More
The best gadget gifts for 2017 A holiday gift guide for anyone who wants to spread some techie joy. More
14 awesome toys for the holiday wish list From a DIY Star Wars Droid to a new Hatchimals toy and interactive Fingerlings, these products are worthy of a coveted spot on holiday wish lists. More