Mortgage applications increase by almost 17%
The Mortgage Bankers Association Weekly Mortgage Application Survey reported a 16.7% increase in mortgage applications for the week ending Jan. 8, 2021, on a seasonally adjusted basis.
In addition, the refinancing index increased by 20% compared to the previous week and was 93% higher than that of the same week in 2020. The seasonally adjusted purchase index increased by 8% compared to the previous week.
“The boom in refinancing activity in the first full week of 2021 has pushed mortgage applications to their highest level since March 2020, despite most mortgage rates rising in the survey. Expectation of further fiscal stimulus from the incoming administration and the rollout of vaccines improving the outlook, pushed up yields and Treasury rates. The 30-year fixed mortgage rate climbed by two basis points to 2.88%, but reversing the trend, the 15-year fixed rate fell to 2.39% – a record high, ”says Joel Kan, the MBAAssociate Vice President of Economic and Industrial Forecasts of. “Even with rising mortgage rates, refinancing did not slow down to start the year, with the index hitting its highest level since last March. Both conventional and government refinancing requests have increased, as demands for government loans have increased. having their strongest week since June 2012. “
“Sustained demand for housing continued to support purchasing growth, with activity up nearly 10% from a year ago. The decline in the average loan balance observed was in part due to a 9.2% increase in FHA applications, which is a positive sign of first-time buyers returning to the market, ”Kan added.
The refinancing share of mortgage activity now stands at 74.8%, against 73.5% the previous week. The share of variable rate mortgage activity fell to 1.6% of total applications, according to the report.
Meanwhile, FHA’s share of total claims declined to 9.6%, VA’s share increased to 15.8%, and USDA’s share remained stagnant at 0.4%.