As the holiday season kicked off, buyers and homeowners got hungry for home financing.
An index tracking the number of mortgage applications to purchase homes increased 4 percent last week, seasonally adjusted, compared to the prior week, according to the Mortgage Bankers Association’s weekly survey.
It was the second consecutive weekly increase for the metric, known as the purchase index. The index had not grown for seven straight weeks until the second week of November.
Refinancing activity was also up: MBA’s index tracking applications to refinance increased 5 percent from the week before.
Joel Kan, MBA’s head of industry forecasting, attributed the jump in home loans to the drop in the average 30-year, fixed-rate mortgage rate to 2.92 percent from 2.99 percent. That rate was the lowest in the 30-year history of MBA’s weekly survey.
“The decline in rates ignited borrower interest, with applications for both home purchases and refinancing increasing on a weekly and annual basis,” Kan said in a statement.
The unadjusted purchase index was up 19 percent year-over-year, while the refinance index was up 79 percent year-over-year. Jumbo purchase rates increased, however, to 3.18 percent from 3.11 the week before. Many lenders are tightening lending criteria for jumbo loans, particularly in densely populated urban markets.
Overall, applications for all home loans increased by nearly 4 percent last week. Refinancing requests made up more than 71 percent of home loan applications, according to MBA’s report.