Falling mortgage rates are helping create a renewed interest in refis, while the upward trend in the Purchase Index is confirming that the housing market has likely hit and rebounded from the bottom.
In the latest week, the US Mortgage Bankers Association reported the Purchase Index increased 5.6% and the Refinance Index gained 17.4%.
In recent weeks the US MBA has not reported the level of the indices, just the percentage changes, and the charts are based on those movements provided by the organization.
The US MBA also noted that for the first tine since mid-May, rates on a 30-year fixed dipped below 5%. The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.97% from 5.08%, with points increasing to 1.12 from 0.98 (including the origination fee) for 80 percent loan-to-value ratio loans.
With rates at historically low levels, and the first-time home buyer tax credit set to expire in just over two months, potential home buyers are being given excellent incentives to move back into the market.
Moreover, prices have fallen from highs set a couple of years ago and in some markets are down significantly.
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