As interest rates dropped once again below 5 percent mortgage applications surged last week to their highest level since May.
In a report released yesterday by Mortgage Bankers Association the seasonally adjusted index of mortgage applications for both refinance loans and new home loans increased 12.8 percent to 668.5, which is the highest level since the latter part of May.
New home mortgage applications, which are used as an early indicator of future sales, were very active while other consumers applied for home refinancing loans. Seeing these trends is a very good sign for the hard-hit housing market, which is now showing signs of stabilization.
What's really helping to fuel the housing recovery are low interest rates on mortgages which have made a big impact on home affordability and if they can stay relatively low they could be a major key to a truly sustained recovery for the market.
30-year fixed-rate mortgages, minus fees, are 4.97 percent, which is down 0.11 percentage point from the previous week. That is the lowest interest rates have been since the third week of May when 30-year fixed loans were also below 5 percent.
Moreover, 15-year fixed mortgage rates remained at 4.41 percent from the previous week.