Refinances Up as Mortgage Rates Go Down

The economy may be making a slow upward turn as mortgage rates continued to fall this week. Mortgage applications were up by 11.9% this week, one of the sharpest inclines over the past eight months. Though applications are down by 10.9% when compared to the same week in 2005, the difference in percentages is the smallest deterioration since April. Refinance applications rose 17.5%, the largest increase for refinances seen in almost a year.

With mortgage rates continuing to drop, refinance applications made up almost 47% of all applications, a significant jump from 44% last week. The past seven weeks have experienced mortgage rates dropping by 30 basis points, making the average 30 year fixed mortgage rate 6.24%; that rate is 57 basis points lower than a June high of 6.81% for the average 30 year fixed mortgage. Applications for home purchases also rose this week, showing a 7.6% increase from last week, when home purchase applications were at a three-year low.\r\n