Mortgage interest rates drop slightly-Mortgage applications increase

Home-buyers mortgage activity increases from week before…down from a month ago though

Dennis Norman

The Mortgage Bankers Association (MBA) released its weekly mortgage applications survey for the week ending January 8, 2010. The report showed the MBA Purchase Index (a measure of the volume of loan applications related to a home purchase) increased 14.3 percent from the week before and the four-week moving average for the index is down 6.4 percent.

Homeowners taking advantage of near record-low interest rates and refinancing their existing mortgages continue to dominate the mortgage application activity this week with 71.5 percent of loan applications for the week up from 68.2 percent the week before. ARM’s continue to be unpopular among borrowers and only make up 4.0 percent of new mortgage loans.

Interest rates and fees for the week:

• 30 year fixed-rate mortgage interest rates decreased to 5.13 percent from 5.18 percent the previous week, with fees decreasing to 1.17 percent from 1.28 percent on loans that are 80 percent of the value of the home.
• 15 year fixed rate mortgage interest rates decreased to 4.45 percent from 4.62 the previous week, with fees increasing to 1.04 percent from 0.98 percent on loans that are 80 percent of the value of the home.
• One-year ARM interest rates increased to 6.83 percent from 6.42 percent with fees decreasing to 0.31 percent from 0.50 percent for loans that are 80 percent of the value of the home.

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