Coforming Rates Fall Lure Refiance Applications

From CNBC: Mortgage Demand at 5-Year High as Rates Plunge
The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended Dec. 19 soared 48.0 percent to 1,245.4, the highest reading since the week ended July 18, 2003.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 5.04 percent, down 0.14 percentage point from the previous week, the lowest level since the week ended June 13, 2003, when the rate reached 4.99 percent.

Interest rates are sharply below the peak of 6.59 percent reached during the summer and below a mere month ago when they were at 5.99 percent, according to the trade group. Interest rates were also well below year-ago levels of 6.10 percent.

The MBA's seasonally adjusted purchase index rose 10.6 percent to 316.5. The index, however, came in well below its year-ago level of 394.5, a drop of 19.8 percent. Overall mortgage applications last week were 106.3 percent above their year-ago level. The four-week moving average of mortgage applications, was up 28.8 percent.

The group's seasonally adjusted index of refinancing applications jumped 62.6 percent to 6,758.6, the highest reading since the week ended July 4, 2003, when it reached 6,768.3. The index was up 252.9 percent from its year-ago level of 1,915.3. The refinance share of applications increased to 83.2 percent from 76.9 percent the previous week. The adjustable-rate mortgage share of activity decreased to 0.8 percent, down from 1.1 percent the previous week.

From Calculated Risk: Conforming Mortgage Rates Fall, Jumbo Spread at Record

Jumbo mortgage shoppers in the most expensive U.S. housing markets such as New York and San Francisco aren’t getting much relief from lower borrowing costs.

The average 30-year fixed rate for home loans of more than $729,750 remains almost 2 percentage points above conforming rates and the spread between them may set a record this month. The difference between the two averaged 2.13 percentage points in December, 10 times the spread from 2000 to 2006 and above last month’s 1.95 percentage points that was the highest on record.

It's jumbos rates that matter for most of California and other higher priced markets.