US Mortgage Applications Rise Ahead of Fed Rate Hike

Borrowers expecting the Fed to raise interest rates rushed to apply for mortgages last week.

A strong monthly employment report Friday also helped the rise in mortgage applications, which jumped 1.2 percent on a seasonally adjusted basis last week from the previous week, according to the Mortgage Bankers Association.

The Federal Reserve is expected to announce its first interest rate increase in more than nine years when it meets next week.

Refinance volume was entirely behind the gains. Applications to refinance rose 4 percent from the previous week, seasonally adjusted (the previous week included an adjustment for the Thanksgiving holiday).Refinance applications are even up slightly from a year ago, when interest rates were lower.

Applications to purchase a home were basically flat, up 0.04 percent from one week earlier. Purchase volume, however, is 29 percent higher than the same week one year ago, indicating stronger home sales to come. A monthly survey of consumer sentiment by Fannie Mae found a slight improvement in respondents saying now is a good time to buy, despite challenges in affordability and tight supply of homes for sale.

via CNBC

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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