Digital News Report – Low interest rates may be benefiting homeowners. While home purchases are lower, the number of homeowners refinancing has increased. Purchase demand is near a 13-year low but the low interest rates have renewed interest in refinance mortgages.
Both the Mortgage Bankers Association and Freddie Mac, a government sponsored enterprise, have said that rates are near historic lows. The homebuyer tax credit has expired so lenders are focusing on home equity refinance loans.
The MBA said its seasonally adjusted index of mortgage applications increased 11.3 percent for the week ended May 21. These included both refinance and purchase contracts.
The budget crisis in Europe may be causing lower rates, according to Michael Fratantoni, MBA’s Vice President of Research and Economics. The crisis has caused turmoil in the financial markets. “In contrast, purchase applications fell further this week, following last week’s sharp decline, keeping the purchase index at 13-year lows,” Fratantoni said.
By: Tina Brown