Mortgage Applications Rise 14% on interest rate drop

“We saw significant rate volatility last week surrounding the FOMC meeting, and rate declines toward the end of the week likely drove applications from both prospective homebuyers and borrowers looking to refinance,” said Mike Fratantoni, MBA’s chief economist.

Refinance applications, which are speed-sensitive, increased 18 percent in the prior week. 9 percent increased to their highest level since June 2015. They may be now 27 percent more in relation to the same week one year ago.

“The upsurge in purchase action was entirely driven by applications for standard purchase loans, which reached the highest level since June 2013. That time period was the so called taper tantrum, when Fed communicating was picked up considerably following by mortgage rates to impede the rate of its own asset purchases. All in all, the purchase marketplace continues to show strength,” included Fratantoni.

Despite moves lower through the week, by the conclusion the typical contract interest rate for 30-year fixed-rate mortgages with adjusting loan balances ($417,000 or less) was unchanged at 4.09 percent, with points increasing to 0.45 from 0.42 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

Reference: CNBC