Wednesday, December 3, 2008

KnowledgePlex Article


Julianne Pepitone
CNN Money
December 3, 2008

Mortgage applications more than doubled in the holiday week ended Nov. 28, the Mortgage Bankers Association said Wednesday, as government bailouts led to sinking interest rates. In the weekly report, the Market Composite Index - the association's measure of mortgage loan application volume - surged 112.1% on a seasonally adjusted basis from the week earlier.
On an unadjusted basis, the index increased 51.4% from the previous week; it was down 21.9% from a year earlier, the report said. Results include an adjustment to account for the Thanksgiving holiday.
Rates plummeted following the Fed's announcement that it would buy debt and mortgage-backed securities from mortgage finance companies Fannie Mae and Freddie Mac, according to Orawin Velz, associate vice president of economic forecasting, in a statement.

"Many of those on the sidelines decided to quickly jump in and take advantage of lower rates before they began to rebound," Velz said. The Mortgage Bankers Association said 30-year fixed-rate mortgages fell to 5.47% this week. That's was down from 5.99% last week. Rates on 15-year fixed-rate mortgages fell to 5.13% from 5.78%, the report said. The rate on a one-year adjustable-rate mortgage declined to 6.61% from 6.87%.
Copyright 2008 Cable News Network All Rights Reserved

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