30 Oct 08 Home Loan Applications Rise as Fed Cut Rates
As the Federal Reserve made another cut in its federal fund rate on Wednesday, the Mortgage Bankers Association reports that pent-up demand and already lowered rates led to a surge in mortgage applications of 17% last week. FHA home loan activity rose, conventional mortgage activity jumped and home refinancing led the surge.
The Fed’s rate, what banks charge each other on overnight lending, now stands at 1% following a half-point cut made in concert with other countries several weeks ago. According to mortgage executive Bryan Dornan, “Lowering the mortgage rates was the right thing for homeowners and it could to see the Federal Reserve is doing what it can to help give banks an incentive to lend money.”
Mortgage rates for a thirty-year, fixed-rate home loans dropped to 6.06% from 6.46% two weeks ago, according to mortgage giant Freddie Mac. The MBA reported that home refinance loans accounted for 46.9% of all applications last week, up from 42.6% the week before.
Tags: home loan, mortgage rates
Leave a Comment
