Mortgage Applications for Home Purchases Tick Up 3.4%
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Home buyers and refinancers are looking at cashing in on record-low interest rates, sending mortgage applications higher for the week.

Mortgage applications for purchasing a home increased again last week, rising 3.4 percent for the week ending May 4, the Mortgage Bankers Association reports in its weekly survey.

Overall, mortgage applications rose 1.7 percent this week compared to the prior week. Applications for refinancing, which make up the biggest bulk of mortgage applications, increased 1.3 percent.

Home owners refinancing at today's lower rates are seeing savings, according to a refinance analysis of the first quarter by Freddie Mac. Home owners who refinanced are, on average, seeing a reduction in an interest rate for a 30-year fixed-rate mortgage of about 1.5 percentage points, or a savings of about 27 percent in the interest rate. It’s the largest percentage reduction in interest rate recorded for refinancing in the 27 years that Freddie Mac has been compiling data.

Source: “Mortgage Application Volume Rose 1.7% Last Week - MBA,” Dow Jones Newswires (May 9, 2012) and “79% of Refinancing Home Owners Maintain or Reduce Mortgage Debt in First Quarter,” RISMedia (May 9, 2012)