Despite the recent drop in mortgage rates, refi applications are not gaining as much momentum as the rather dramatic dip in rates should suggest. Some market experts said that this sharp decline in the MBA Index levels may mean a plunge in refi volume going forward, but others warn that the mortgage market may be back to where rapid prepayments are in danger of coming to the fore once again.

The MBA Refinance Index rose to 1320.6 for the week ending April 19, which was up by roughly 6% from the previous week's reading of 1246.1.This is in response to a 5% dip in mortgage rates. The more telling event was when the Freddie Mac 30-year survey rate dropped to 6.99% from 7.13% for the week ending April 12 - which is a 14 basis point drop - the Refi Index only rose by 3% in response to this rather remarkable plunge in rates.

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