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Refinances biggest driver of mortgage activity

Posted by The Aramco Group on Fri, Jun 24, 2016 @ 14:06 PM

The number of Americans refinancing their homes increased last week as interest rates remained near historic lows. According to the Mortgage Bankers Association's report for the week ended June 17, the refinancing share of total mortgage volume increased to 57.7 percent from 55.3 percent the previous week.

Applications to purchase a home decreased two percent when adjusted seasonally, indicating a weak start to the summer home buying season. Rising home prices and a limited selection of homes on the market have been a deterrent for buyers in 2016, although the overall purchase index is still 12 percent higher than levels seen a year ago.

The FHA share of total applications remained relatively stable moving down from 11.8 to 11.7 percent. FHA loans continue to maintain their popularity, particularly among first time home buyers. The government program allows borrowers to buy a home with as little as 3.5 percent down.

Interest rates oday, conforming no-point 30-year fixed mortgage rates average 3.625 percent while the 15-year rate is near 2.875 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.