Refinance activity tracks mortgage rate movement
Posted July 7, 2011 6:57 p.m. EDT
According to the Mortgage Bankers Association, mortgage applications overall were down 5.2 percent last week, as higher rates impacted refinance activity – but interestingly enough, purchase activity was up considerably prior to the July Fourth holiday.
More specifically, the MBA’s seasonally adjusted refinance index, showed a steep decline of 9.2 percent for the week ending July 1 – but their purchase gauge rose 4.8 percent. The obvious note here is that the refinance transaction is much more sensitive to slight rate movement than is the purchase transaction.