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Interest in mortgage refinancing skyrocketed earlier this year, increasing 20% from the previous week.
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The surge in refinancing has also led to an increase in aggregate demand for mortgage applications of 16.7% from the previous week, according to the latest Mortgage Bankers Association survey.
The previous week’s results included an adjustment for vacation.
The number of people intending to buy a home rose 8% last week.
“Booming refinancing activity in the first full week of 2021 has pushed mortgage applications to their highest level since March 2020, despite most survey mortgage rates rising last week “said Joel Kan, MBA associate vice president for economic and industrial forecasting. “Anticipation of further fiscal stimulus from the incoming administration, and the rollout of vaccines improving the outlook, have pushed up Treasury yields and rates.”
THE PRICES OF THE HOUSE HAVE THREADED THE MOST IN OVER 6 YEARS
The refinancing share of mortgage activity rose to 74.8% of total applications, from 73.5% the previous week.
Demand for mortgages and refinancing increased despite the 30-year fixed mortgage rate rising two basis points to 2.88%.
The 15-year fixed-rate mortgage, however, fell to 2.39%.
“Sustained housing demand continued to support buying growth, with activity up nearly 10% from a year ago,” Kan added. “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 more low-income and first-time buyers returning to the market. “
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The survey covers more than 75% of all residential mortgage applications in the United States and has been conducted weekly since 1990.
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