Mortgage Apps: Refis Jump As Rates Plunge

Bottom Line: Mortgage activity jumped last week as rates plunged amid stock market volatility. Refinancing applications jumped over 25% in the final week of February, while purchase applications fell slightly. The average 30-year fixed-rate averaged 3.57%, near the record low. Secondary mortgage market rates were nearly a full point below that, suggesting the full impact of the drop in rates hasn't been passed on to borrowers yet, which is typical amid increased volatility. Bankers were quick to staff-up for what appears to be another refi-boom with anecdotal reports of large banks repurposing staff to handle the surge in applications. Most indications suggest mortgage rates available to prime borrowers edged lower again this week. The MBA Mortgage Applications Index ROSE by 15.1% during the week ended February 28 to 754.1, sharply above its 13 week average of 592.2 and 100.9% ABOVE its year-ago level. The Purchase Index FELL by 2.7% to 265.8, modestly below its 13 week average of 274.1 but 10.5% ABOVE its year-ago level. The Refinance Index ROSE by 26.0% to 3,594. Despite this increase, refinancing activity is sharply above its 13 week average of 2,450 and 223.6% ABOVE its year-ago level. Contract Mortgage Rates FELL with the 30-year fixed rate declining by 16 bps to 3.57% and the 15-year fixed rate declining by 15 bps to 3.03%.