April 23, 2018

Loan Demand Posts Whopping 21% Surge

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Loan Demand Posts Whopping 21% Surge

Total mortgage application activity — for refinancings and home purchases combined — posted a strong rebound last week, climbing 21.3 percent on a seasonally adjusted basis, the Mortgage Bankers Association reported Wednesday.

“The good news for the new year is that following the holidays, application activity last week resumed at levels just exceeding those observed during early December, suggesting that the purchase market has picked up right where it left off,” says Lynn Fisher, the MBA’s vice president of research and economics.

Expect an increase in home buying at the start of the year. The MBA’s report shows that mortgage applications to purchase a home, viewed as a leading gauge of future home sales, rose 18 percent last week on a week-over-week, seasonally adjusted basis. Applications for home sales are now 19 percent higher than the same week one year ago.

"The MBA's purchase mortgage application index reached its second highest level since May 2010 on a seasonally adjusted basis last week, second only to the week prior to the implementation of the Know Before You Owe rules," Fisher told CNBC.

Meanwhile, applications for refinancing loans posted a 24 percent increase week-over-week. However, refinancing applications are 38 percent lower than the same week one year ago.

The MBA reports that the average 30-year fixed-rate mortgage fell to 4.12 percent last week from 4.20 percent the week prior.

Source: “Mortgage Applications Rebound 21%: Here’s Why,” CNBC (Jan. 13, 2016)