Federal Reserve's recent rate cut has caused a rush in refinance activity among homeowners. 30 yr FRMs are now available at an average rate of 5.57% which is very close to the historic low of 5.21% in 2003.Market Composite Index, which is known as a measure of application volume for mortgage loans from Mortgage Banker's Association (MBA) has gone up by 8.3% from where it was a week ago.
Refinance rush is expected to get further boost from the fact that an economic stimulus package has been proposed by government & because of which Freddie Mac & Fannie Mae will be able to buy mortgage loans worth much more than what is allowed presently.
In such scenario, it will become feasible for homeowners to refinance more expensive mortgages also.