US Mortgage Applications Rise to 6 Year High Last Week

Applications for U.S. home mortgages surged by the most in more than six years last week as 30-year mortgage rates dropped below 4 percent for the first time since May 2013 on the back of falling U.S. government bond yields, data from an industry group showed on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, jumped 49.1 percent in the week ended Jan. 9, its largest weekly percentage gain since late November 2008, in the middle of the U.S. financial crisis.

Refinancing activity was especially heavy. The MBA’s seasonally adjusted index of refinancing applications jumped 66.4 percent, the largest percentage gain in volume also since late November 2008, to its highest level since July 2013.

The gauge of loan requests for home purchases, a leading indicator of home sales, gained 23.6 percent to its highest level since September 2013.

Fixed 30-year mortgage rates averaged 3.89 percent in the week, down 12 basis points from 4.01 percent the week before. They hit their lowest level since May 2013.

“The US economy and job market continued to show signs of strength, but weakness abroad and tumbling oil prices have led to further declines in longer-term interest rates,” said Mike Fratantoni, MBA’s chief economist.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza