Mortgage Applications Surge to Start New Year
At FREEandCLEAR, we follow the Mortgage Bankers’ Association (MBA) mortgage applications index which measures both purchase and refinance applications for mortgage lenders across the country. An increase in the MBA applications index reflects an increase in mortgage applications while a decrease in the index reflects a decline in mortgage applications.
For the week ended January 9th, the composite mortgage application index, which includes both home purchase mortgages and refinancings, jumped a whopping 49.1%, reversing a 9.1% decline in the index for the prior week. The huge increase in the composite application index was driven by a 66.0% increase in refinance applications and a 24.0% increase in purchase applications, which were both negative the prior week. The boom in mortgage application activity was fueled by pent-up demand coming out of the normally slow holiday season as well as continued low interest rates. The average interest rate for conforming loans decreased to 3.89% as compared to 4.01% for the prior week. The surge mortgage activity is a welcome sign to start 2015. (Source: Bloomberg)
What it Means for Mortgage Borrowers
Mortgage borrowers started the year off with a bang by taking advantage of low interest rates to refinance their mortgages and purchase new homes. We will continue to watch the mortgage application index to see if the jump in activity is the start of a positive trend or a more temporary event coming out of the slow holiday season. If interest rates remain low we should see strong mortgage application activity continue over the next several months. With interest rates declining now may be a good time to buy a home or refinance your mortgage. Use the FREEandCLEAR Mortgage Qualification Calculator to see what size mortgage you can afford and our Refinance Calculator to determine how much money you could save by refinancing your existing mortgage. And continue to keep track of interest rates and fees for lenders in your area by using the the INTEREST RATES feature on FREEandCLEAR.
The FREEandCLEAR Mortgage Expert
%