Refinance applications for the week ending January 8 increased 20% according to the Mortgage Bankers Association’s seasonally adjusted index. This is 93% higher than a year ago and the highest rate since March.
Both traditional and government refinance applications were with their largest week-long government loans application since June 2012.
Joel Kahn, MBA’s Associate Vice President for Economic and Industry Forecasting, said, “Fast-growing activity in the first full week of 2021 prompted mortgage applications to grow to their highest level since March 2020, a survey last week. Was in spite of most mortgage rates. “
In the MBA interest rates survey last week, the 30-year fixed mortgage rate rose by two basis points to 2.88%. But the 15-year fixed rate ticked down to 2.39% – a record low.
The share of mortgage activity that was refinanced increased to 74.8% of total applications from 73.5% the previous week.
According to Black Knight, a mortgage data company, with such a drop in rates, those who can get the benefit of refinancing have the largest share.
Purchase applications are up 60% from the previous week, and they are up 10% from a year ago.
“Sustainable housing demand continued to support purchase growth with growth of about 10% a year earlier,” Kahn said, adding that the lower average loan balance is partly due to a 9.2% increase in FHA applications. , Which is a positive sign. More low-income and first-time market returning buyers. “
A combination of economic, political and epidemiological factors suggests that the mortgage rate will gradually increase this year. Kahn said additional fiscal stimulus is expected from the incoming administration and the rollout of vaccines has raised treasury yields and rates next week.