The sharp dip underway in rates is triggering a surge in refinance applications which rose 13.0 percent in the May 11 week. The average rate for conforming mortgages (under $417,500) fell five basis points to 3.96 percent which is the lowest rate in the history of the survey. Rates for jumbo loans, FHA loans, as well as the 15-year rate are all at record lows. MBA attributes the drop in rates to safe-haven buying of US Treasuries tied to sovereign debt trouble in Europe.
Purchase applications remain flat, down 2.4 percent in the week with the four-week average up 1.8 percent. These results point to little change for underlying home sales. Next data on the housing sector will be starts & permits at 8:30 a.m. ET this morning.