Demand for mortgage applications saw a dramatic jump last week, according to new numbers from the Mortgage Bankers Association. Overall, application demand was up 23.5 percent from one week earlier. A large share of the rebound was from homeowners looking to refinance now that rates have fallen to their lowest level since last February.
Though much of the surge was from refinance activity, home purchase loans also had a good week. Joel Kan, MBA’s vice president of economic and industry forecasting, said purchase activity rebounded after an end-of-the-year slump. “Purchase applications had their strongest week in a month, finishing over 4 percent higher than a year ago, as both conventional and government purchase activity bounced back with solid gains after a sluggish holiday season,” Kan said.
Though the gains were impressive, the week’s results follow an unusually slow holiday season and include an adjustment for the New Year’s Day holiday. Going forward, there is some concern that the government shutdown and stock market volatility may negatively affect housing market activity, but lower mortgage rates and surging demand are an encouraging sign to start the year.