Fearful of rising interest rates following Donald Trump’s election victory, homebuyers are rushing to land mortgages. The number of home loan applications in the U.S. last week was 5.5 percent higher than a year ago, according to the Mortgage Bankers Association.
Overall loan dollar volume was up 10 percent.
“The increase in purchase activity was driven by borrowers seeking larger loans, with applications for purchase loans above $417,000 increasing 16.8 percent for the week,” MBA’s chief economist Michael Frantantoni told CNBC. “This change led to the average purchase application loan amount reaching a new record of $310,000.”
One reason for the spike in jumbo loans is that the spread between their interest rate and the rate on regular 30-year loans has widened, Frantantoni said.
Applications for mortgages to refinance homes, meanwhile, fell by 3 percent.
The 10-year Treasury yield, a benchmark for mortgage rates, rose in the wake of Trump’s victory as investors predict his planned fiscal stimulus could lead to rising inflation and interest rates.
[CNBC] — Konrad Putzier