Loan Demand Surges on Fear of Rising Rates
Applications for fixed-rate mortgages climbed to the highest level in nearly a year as borrowers rushed to lock in interest rates before they jump higher. Total mortgage application activity for refinancings and home purchases rose 8.4 percent week-over-week on a seasonally adjusted basis for the week ending June 5, the Mortgage Bankers Association reported Wednesday.
"Mortgage application volume rebounded strongly," says Mike Fratantoni, MBA's Chief Economist.
Broken out, refinance applications rose 7 percent week-over-week while applications for home purchases rose 10 percent. Applications for home purchases are now 15 percent higher than the same week a year ago. Refinance applications still remain nearly 5 percent below last year's levels. MBA reports that the average 30-year fixed-rate mortgage rose to 4.17 percent last week, the highest since last November.
"These increases really help the homebuying market," Matt Weaver with PMAC Lending told CNBC. "It really gets buyers to understand that ... rates are at an all-time low — let's react before they go higher."
Source: “Weekly Mortgage Applications Jump as Rates Surge,” CNBC (June 10, 2015)