If you were wondering whether or not consumers would respond to low interest rates, you could now have an answer.
Mortgage applications shot up 49 percent for the week ending January 9, 2015, according to the latest data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey. The weekly increase is the largest since November 2008. The tremendous jump was due in large part to a 66 percent increase in applications to refinance, but new purchase loans also played a role, rising 24 percent.
The increase in applications is largely being attributed to low interest rates. Last week, the average fixed rate 30-year mortgage dropped to 3.73 percent with an average 0.6 point, the 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,” Mike Fratantoni, MBA’s Chief Economist, said in a statement.
Now, it is important to note that the 49 percent increase comes by comparing what was likely a slow week on the mortgage front (the final week of 2014) and the first week of 2015. Still, a 49 percent jump is a substantial increase no matter how you look at it.
This article originally published at http://dc.urbanturf.com/articles/blog/mortgage_applications_skyrocket_49_percent_on_low_interest_rates/9404
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