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The 5.1% week-to-week hike in mortgage applications has piggybacked largely on robust growth in the volume of refinancing. The MBA’s Weekly Mortgage Applications Survey (for the week closing on 10th July) reveals that the refinance index has more than doubled on the year-to-year chart and shot up 12% on the week-to-week chart. The weekly result has been adjusted for the 4th of July.
From 60.1% a week prior, refinance levels have hiked to total application’s 64.2% this week. To paraphrase Joel Kan, the MBA’s associate vice president of economic and industry forecasting, the 30-year fixed rate has come down 7 basis points and sits at 3.19%. This is 63 basis points below what we had in March. Such meager mortgage rates, believes Kan, has caused the spike in refinance activity. Purchase levels, too, offer a robust trend, the economic unreliability notwithstanding.
The MBA’s Builder Application Survey says that 20% more consumers, in comparison to May, have sought mortgage. The year-to-year leap is 54.1%.”Although this is not adjusted for seasonal impacts, it is another piece of data indicating that home-buying activity that was delayed by the pandemic in March and April is just being realized later in the season,” said Kan. He further stated that “The fact that applications are up over 50% from last June further reinforces that point.”