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Survey: Mortgage refinancing applications increase 14.5%

November 10, 2010 - Many homeowners appear to be taking advantage of low interest rates by mortgage refinance, indicates recent data.

The Mortgage Bankers Association (MBA) Weekly Mortgage Applications Survey for the week ending October 30, showed that the Market Composite Index, which measures new mortgage applications, increased 8.2 percent on a seasonally adjusted basis from the previous week.

Meanwhile, the Refinance Index jumped 14.5 percent on a seasonally adjusted basis from the week prior.

Refinance applications accounted for 66.1 percent of the total amount of mortgage activity, up from 62.3 percent a week earlier. This increase in refinance activity may be the result of homeowners looking to take advantage of the low interest rates on 30-year fixed mortgages which the MBA reports dropped to 4.97 percent.

While these may be positive signs, Ronald Temple, portfolio manager and co-director of research at Lazard Asset Management in New York, says that there has been a false sense of security that the worst is over for the housing market and cautions that there may still be an increase in foreclosures and a rise in interest rates in the near future, reports Reuters.

For those thinking of starting the relocation process, the good news is that the first-time homebuyer tax credit has been extended until June 30, 2010, and homeowners thinking of moving may qualify for a $6,500 tax credit if they have owned their home for five out of the past eight years.

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