Last week, Chicago Real Estate Forum discussed mortgage rates, which are still hitting record lows, and asked the question: Are they enough to spur housing activity in this tough economy?
This week, the answer is yes.
The numbers were positive for both the home Purchase Index, which rose 12.8 percent from one week earlier, and the Refinance Index, which increased more than 19 percent to hit its highest level since April 2009.
?Mortgage application volume increased sharply last week. The increase was accentuated due to the comparison to the week including Memorial Day, but the level of refinance and total market activity is the highest since the spring of 2009,? said Michael Fratantoni, MBA?s Vice President of Research and Economics.
?Refinance volume increased as borrowers were able to lock in at mortgage rates below 4 percent, and purchase application volume was its highest level in over six months.?
The amount of applications filed to refinance an existing mortgage comprised 78.8 percent of all applications last week.
And those numbers could increase. A new refinancing program through the FHA goes into effect this week that could lead to a rise in refinancing volume over the summer.
The FHA Streamline Refinance is for homeowners with existing FHA mortgages and could really benefit those underwater, as it does not require a home appraisal but instead uses your original purchase price as your home?s current value, regardless of what it?s really worth today. It could save struggling homeowners thousands of dollars a year.
For more information on streamlining your FHA mortgage, visit hud.gov.
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