Lower Mortgage Rates Increasing Financing Demand

The steep drop underway in mortgage rates is sharply stimulating demand for refinancing but isn't yet doing much for home purchases. The refinancing index surged 11.0 percent in the October 10 week as the average rate for conforming loans ($417,000 or less) fell 10 basis points in the week to 4.20 percent which is the lowest average since June last year. But in contrast, the purchases index fell 1.0 percent in the week for a year-on-year decline of 4.0 percent.