MBA: Home Refinancing Activity Highest Since May 2009

(RTTNews) - Mortgage activity in the United States rose sharply last week, as extraordinarily low interest rates spurred the biggest jump in refinancing in more than a year.

Still, new purchase applications tailed off, indicating further weakness in the housing market following the expiration of the popular home buyer tax credit offered through April.

The Mortgage Bankers Association's weekly Market Composite Index, a measure of mortgage loan application volume, increased 13.0 percent on a seasonally adjusted basis for the week ending August 13, 2010.

On an unadjusted basis, the Index increased 12.4 percent compared with the previous week.

The Refinance Index increased 17.1 percent from the previous week and was the highest Refinance Index observed in the survey since the week ending May 15, 2009.
However, the seasonally adjusted Purchase Index decreased 3.4 percent from one week earlier.
The refinance share of mortgage activity increased to 81.4 percent of total applications from 78.1 percent the previous week, which is the highest refinance share observed since January 2009.
Interest rates were up slightly but remained uncommonly low. The average contract interest rate for 30-year fixed-rate mortgagesincreased to 4.60 percent from 4.57 percent.
The average contract interest rate for 15-year fixed-rate mortgages increased to 3.99 percent from 3.95 percent.