Mortgage refinancing spike, 93% higher than last year

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Mortgage applications to refinance a home loan have increased by around 20% over the past week to the highest level since March, and the volume is now 93% higher than it was at the same time last year, according to data from the Mortgage Bankers Association’s weekly app survey.

“The boom in refinancing activity in the first full week of 2021 has pushed mortgage applications to their highest level since March 2020, despite rising most mortgage rates in the survey. last week, “said Joel Kan, associate vice president of economic and industrial forecasting at the MBA. , told CNBC. “The expectation of further fiscal stimulus from the incoming administration and the rollout of vaccines improving the outlook have pushed up Treasury yields and rates.”

The network notes that while housing demand remains high, mortgage applications to buy a home were 10% higher at the same time last year. This leaves potential owners with a record number of options available and rapidly rising prices. Despite this, Kan noted that there were good signs for initial buyers.

“The observed lower average loan balance was in part due to a 9.2% increase in FHA applications, which is a positive sign that more low-income buyers are returning to the market and first-time home buyers, ”Kan said.

“For now, an air of invincibility in mortgage rates and the persistent establishment of new record lows have been replaced by a healthy respect for what could be the first step in a rising rate environment, the first times we’ve seen such a thing since 2018, ”added Matthew Graham, COO of Mortgage News Daily.

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