Wealthy Borrowers Behind 9.3 Percent Jump in New Mortgages

A sharp drop in interest rates prompted more homeowners to refinance their mortgages last week, especially those with large loans, the Mortgage Bankers Association said recently. Total mortgage application volume increased 9.3 percent on a seasonally adjusted basis from the previous week. Interest rate-dependent refinances were almost entirely behind the gains. Applications to refinance a home loan rose 16 percent from the previous week, seasonally adjusted, while those to purchase a home rose just 0.2 percent for the week. Purchase applications are still 25 percent higher than one year ago, indicating strengthening in future home sales; while lower rates certainly help homebuyers, they are not an immediate driver of sales. Interest rates were slightly lower one year ago.

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