Homeowners Rush to Refinance as Rates Fall

Mortgage rates declined last week, triggering a dramatic jump in mortgage applications. The Mortgage Bankers Association reported that its weekly index of mortgage application volume rose 17 percent on a seasonally adjusted basis compared to the previous week.

On an unadjusted basis, the index increased 15.8 percent and was up a whopping 64.5 percent compared to the same week a year ago.

Much of the increase was in refinances, with the refinance index increasing 22.5 percent, the biggest jump since March.

The purchase index rose 9.5 percent, which was the largest gain since early April. Mortgage rates were down across the board:
-30-year fixed-rate mortgages decreased to 5.02 percent from 5.15 percent.
-15-year fixed-rate mortgages decreased to 4.45 percent from 4.57 percent.
-1-year ARMs decreased to 6.69 percent from 6.71 percent.

Source: Mortgage Bankers Association (09/09/2009)