Mortgage refinancing jumps 20% to start the year

Interest in refinancing loans increased at the start of the year and increased by 20% from the previous week.

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The increase in refinancing also led to an increase in total demand for mortgage applications by 16.7% from the previous week, according to the Mortgage Bankers Association’s latest survey.

The previous week’s results included an adjustment for the holiday.

The number of people intending to buy a house rose by 8% last week.

“A booming refinancing activity in the first full week of 2021

caused mortgage applications to rise to their highest level since March 2020, despite the fact that most mortgage rates in the survey rose last week,” said Joel Kan, MBA’s assistant vice president of economics and industry. forecast. “The expectation of further fiscal stimulus from the incoming administration and the roll-out of vaccines that improved the outlook drove government dividends and interest rates higher.”

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The refinancing share of mortgage activity increased to 74.8% of total applications from 73.5% the previous week.

Demand for mortgages and refinancing rose despite the fact that the fixed-rate fixed-rate interest rate over 30 years rose two basis points to 2.88%.

However, the 15-year fixed-rate mortgage ticked down to 2.39%.

“Sustained housing demand continued to support purchase growth with activity rising nearly 10 percent from a year ago,” Kan added. “The lower average observed loan balance was due in part to a 9.2 percent increase in FHA applications, which is a positive sign of more buyers with lower incomes and first time returning to the market. ”

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The survey covers over 75% of all US retail mortgage applications and has been conducted weekly since 1990.