Mortgage Bankers Association data shows that since May more than 8 of every 10 loan requests were for refinancing.
With unemployment still high at 9.6 percent and the U.S. housing market reaching for a bottom, last week just over 80 percent of all loans were for refinancing rather than purchases.
Michael Fratantoni, MBA's vice president of research and economics said, "Home buying demand climbed back to levels seen in late May but stayed almost 40 percent lower than a year ago. On the other hand, refinance volume dropped last week for the first time in six weeks, but the level of applications to refinance remains close to recent highs, as historically low mortgage rates continue to draw borrowers into the market."
Since the MBA started record keeping in 1990 fixed 30-year mortgage rates hovered just above the lowest rates only rising 0.07 percentage point last week to 4.50 percent.
Lack of home equity in existing houses, coupled with unemployment and a shortage of money for a down payment still remain among the main roadblocks to home buying.
Greg McBride, senior financial analyst at Bankrate Inc. in North Palm Beach, Florida said, "Low mortgage rates cannot cure all that ails the housing market. The job market does not inspire much confidence, buyers no longer have the incentive of the tax credit, people continue to have trouble selling their existing homes and some believe prices have further to fall."
In order for the nation to get through the housing market crisis more jobs are needed and not additional mortgage programs and low interest rates. One way that can be achieved is to keep jobs in the United States and not ship them off overseas. People without jobs cannot buy homes.