The number of US consumers who applied for loans to buy a home and to refinance 1 rose to an 11-month high last week, signaling that the recent drop in interest rates is reviving housing activity, the Mortgage Bankers Association said in a report Wednesday.
The Washington-based industry group’s seasonally adjusted gauge on mortgage applications increased 13.5% to 411.8 in the week ended 11 January, the strongest reading since February 2018.
The MBA’s seasonally adjusted barometer on loan requests for home purchases climbed 9.1% to 278.5, the highest mark since April 2010.
The interest rates on 30-year fixed-rate mortgages averaged 4.74% for a 2nd week running, the lowest since late April, as US bond yields have been held down by concerns partly due to slowing economic growth and trade tension between China and the United States.
“Uncertainty regarding the government shutdown, slowing global growth, BREXIT, a more patient Fed, and a volatile stock market continued to keep rates from increasing,” the MBA’s chief economist said in a statement.
Most mortgage rates the association tracks were little changed to lower from the prior week, with the average 15-year rate hitting 4.13%, the lowest since April 2018.
“The Spring home-buying season is almost upon us, and if rates stay lower, inventory continues to grow, and the job market maintains its strength, we do expect to see a solid spring market,” he said.
The decline in borrowing costs also has many homeowners refinancing their homes.
The MBA’s seasonally adjusted barometer on refinance applications jumped 18.7% to 1,172.4, the highest since March 2018.
The refinancing share of total applications last week grew to 46.8%, the largest since January 2018, from 45.8% the prior week.
The average mortgage size for refinancing applications reached $353,100, the highest since the MBA began tracking its weekly survey in 1990.
The share of applications for adjustable-rate loans increased to 9.2%, the biggest since October 2014.
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