A surge in home mortgage applications has set the bar high for 2021.
An index tracking applications to buy homes jumped 8 percent, seasonally adjusted, last week, up from the prior week when it declined in the final fortnight of 2020.
The metric, kept by the Mortgage Bankers Association, gained despite rising mortgage rates and was up 10 percent from the same period in 2020.
The average 30-year, fixed-rate mortgage increased to 2.88 percent, up from 2.86 percent the week before. Jumbo rates climbed to 3.17 percent, a 9-basis-point jump that would add about $18,000 in interest costs to a $1 million, 30-year loan.
Refinancing activity last week was up substantially, with the MBA index tracking refi applications increasing 20 percent, week-over-week. The index is up 93 percent year-over-year.
Joel Kan, MBA’s head of industry forecasting, said booming refinance activity caused mortgage applications to reach the highest levels since March 2020.
“The expectation of additional fiscal stimulus from the incoming administration, and the rollout of vaccines improving the outlook, drove Treasury yields and rates higher,” he said in a statement.