30-year mortgage rate keeps falling
30-year mortgage rate declined 4 basis points to 4.21 percent, driving mortgage refinancing applications up 21 percent.
The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages, 1 year ARMs as well as application volume for both purchase and refinance applications.
The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.
The latest data is showing that the average rate for a 30 year fixed rate mortgage declined 4 basis points since the last week to 4.21% while the purchase application volume declined 8.5% while the refinance application volume jumped 21% over the same period.
It's important to note that with the final expiration of the governments massive housing tax credit subsidy, home purchase activity has been trending down precipitously despite continued declining interest rates.
The purchase application volume remains near the lowest level seen in well over a decade.
The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages as well as one year ARMs since 2006 (click for larger dynamic full-screen version).
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