In the past 5 and a half years, last week (the first full week of January 2009) had the largest number of loans being refinanced due to the record low mortgage rate. The low mortgage rates, unfortunately, have not spurred home purchases though. But hey, it all has to start somewhere!

The highest index number of home purchases and refinances was 1358.2, on the week of July 11, 2003, and last week it was 1324.8, a 15.8% increase from the week before. The refinance share of the applications is quite substantial; it jumped up to 85.3% from 79.8% the week before. The highest jump the Mortgage Bankers Association has seen since 1990.

And you do remember what caused the drop in the mortgage rates, right? The Fed initiated a plan to buy back $500 Billion dollars worth of loans from Fannie, Freddie, and Ginnie, and also $100 Billion of their debt.

Feel no rush, folks. It’s likely that the interest rates will remain low for the next few months since the Fed is committed to buying mortgage backed securities to keep borrowing costs low. After the next few months though… There is no telling, so locking these low rates in the meantime is the smart move.

Thanks to the low rates, our nationally depressed real estate market has seen a glimmer of hope. Home purchases and refinances will move lots of money around, and little by little, move the market in a positive direction.

If you’re interested and have questions about refinancing your Tucson, AZ home, email me or leave a comment below.

This entry was posted on Wednesday, January 14th, 2009 at 8:55 am. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.