Refi Demand Pushes Mortgage Application Volume Up

Mortgage applications went into the holiday season with a strong start, according to data from the ""Mortgage Bankers Association"":http://www.mortgagebankers.org/default.htm (MBA).

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The Market Composite Index for the week ending November 30 increased 4.5 percent from the previous week, which had been adjusted to account for the Thanksgiving holiday. On an unadjusted basis, the index was up 49 percent.
[COLUMN_BREAK] Increased refinance activity provided a significant boost to the overall index. The Refinance Index was up 6 percent from the previous survey, while the refinance share of mortgage activity rose two percentage points to reach 83 percent.

Applications for purchase mortgages also saw a boost, however slight. The seasonally adjusted Purchase Index increased 0.1 percent from the week prior, while the unadjusted index rose 36 percent.

The average interest rate on a 30-year fixed-rate mortgage fell to match record lows at 3.52 percent, the MBA reports.

Paul Diggle, property economist for ""Capital Economics"":http://www.capitaleconomics.com/, noted in an analysis that while purchase demand is still subdued, continuing gains paint a picture of a recovering market.

""After all, banks have been reporting stronger demand for a few quarters now, and the value of their outstanding mortgage loans is increasing,"" Diggle said. ""Either way, demand from mortgage-dependent buyers will eventually have to pick up if activity and prices are to return to more normal levels.""