This week mortgage applications increased 12.6% compared to last week. This huge increase in the volume of applications is in part due to the rebound of mortgage application activity in the areas that were affected by Hurricane Sandy two weeks ago.
Another important factor that might have influenced this huge increase in applications is that according to Freddie Mac, this week 30-year, 5-year and 1-year mortgage rates have all reached new record-lows.
This week 30-year fixed-rate mortgages decreased from 3.4% last week to 3.34%. This is a new record-low rate for 30-year mortgages that hasn't been seen in almost half a century.
15-year mortgage rates decreased from 2.69% last week to 2.65% this week reaching a new record low mortgage rate that hasn't been seen in more than 40 years. This rate is nearly 0.1% lower than 5-year mortgage rate.
5-year mortgage rates are the only ones that increased this week, from 2.73% last week to 2.74% this week. This slight increase places 5-year rates at the same percentage as two weeks ago.
1-year adjustable-rate mortgages reached a new record low this week when they decreased from 2.59% last week to 2.55%. This is the lowest rate in more than four decades.
The refinance share of mortgage applications also increased this week to 81% compared to 80% last week, while the share of adjustable-rate mortgages remains steady at 4% for the fourth consecutive week.