The nationwide number of refinances sought by consumers in the week ending January 7 rose by a seasonally adjusted 4.9 percent over the previous period, which included the New Year’s holiday, according to the latest statistics from the Mortgage Bankers Association. This may be the result of average interest rates on 30-year fixed-rate mortgages declining from 4.82 percent to 4.78 percent, and points falling to 0.91 percent from 1.1 percent.
This was the second straight week of declines in home loan interest rates, the report said. In previous weeks, the average rate for mortgages surged upwards near 5 percent and reached a seven-month high.
The increase in refinances led to a jump in the entire mortgage market, the report said. The MBA’s overall market index rose a seasonally adjusted 2.2 percent even as purchases declined 3.7 percent. This was because refinances make up a significant portion of the industry – up to 72.1 percent from an even 71 percent in the previous week.
The four-week moving average for the entire market is still down 5.3 percent, the report said. Even with the rise in refinance activity, this portion of the market still decreased 7.5 percent.
Some experts believe refinances may have declined in recent weeks because many eligible consumers scrambled to obtain such a financial product when rates were at or near historic lows in late summer.