February 20, 2017

Loan Demand Spikes; Buyers Jump on Rates

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Loan Demand Spikes; Buyers Jump on Rates

Mortgage rates fell further last week and home buyers and home refinancers quickly rushed to take advantage. Total mortgage applications — for home purchases and refinances — rose 8.8 percent on a seasonally adjusted basis last week, the Mortgage Bankers Association reports.

“Borrowers are clearly seeing the rate drop as perhaps a last opportunity to seize on historically low rates,” CNBC reports.

Many economists predict mortgage rates will rise this year, but rates have taken their time at the beginning of 2016 to start moving up.

Refinance applications prompted most of the increase, rising 11 percent week-over-week, the MBA reports. Still, refinance applications are 30 percent below the same week a year ago.

Applications for home purchases, viewed as a gauge of future home sales, rose 5 percent week over week and are now 22 percent above a year ago.

The 30-year fixed-rate mortgage fell to its lowest level since October, averaging 4.02 percent last week, the MBA reports.

Source: “Mortgage Applications Up 8.8% as Buyers Look to Lower Rates,” CNBC (Jan. 27, 2016)