The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, increased 32.2 percent to 1,159.4 for the week ended March 20. Refinancing accounted for 78.5 percent of all applications.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 4.63 percent, down 0.26 percentage point from the previous week, reaching a record low, the MBA said. It has been conducting the weekly survey since 1990.
The Fed's purchases are part of its ongoing efforts to reduce mortgage rates to stimulate borrowing and boost the U.S. housing market, currently in the throes of the worst downturn since the Great Depression.
However, so far, the low rates have had only a moderate impact on demand for loans to buy homes.
Mortgage brokers may be busy - but it has not been from changes in the housing market. The drive is for people who already own homes to save more of their money. This is definitely part of a stimulus policy. These savings on mortgage payments is putting money back into people's pocket so they can use it on other things.
Now the big questions are how cheaply one can refinance (we have seen free and $499 refinancings up to almost $10,000) and how low the rates can go.