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February 23, 2011

Mortgage Demand Rises
The Mortgage Bankers Association released its weekly report on mortgage activity Wednesday, showing an increase in applications as interest rates fell to their lowest levels since the end of January. The MBA's index of loan applications rose 13 percent for the week ended February 18th, this after falling the previous week to a 15-month low. The gain was predominantly in refinancing loans, which increased 18 percent, while purchase applications gained 5.1 percent.

The average rate for a 30 year fixed-rate mortgage for the week fell to 5 percent as political unrest in Libya and North Africa prompted investors to seek the relative security of Treasury bonds, which influence mortgage rates. Yet demand, analysts feel, will take some time to pick up as mounting foreclosures, falling values, and the nation's jobless rate hovering above 9 percent keep buyers away from the market.

30 year fixed-rate home loans averaged 5 percent for the week, down from 5.12 percent in the week prior. The most popular US mortgage type, the rate bottomed out in October at 4.21 percent, the lowest average reported since the NAR began tracking rates in 1990.



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