Mortgage applications rise as rates reach another record low

Requests for loans to buy homes climbed 2% last week

Low interest rates have contributed to a surge in applications for mortgages and refinancing. (iStock)
Low interest rates have contributed to a surge in applications for mortgages and refinancing. (iStock)

A new home is clearly on some holiday gift lists.

Demand from homebuyers rose last week, sending an index tracking applications to purchase homes up 2 percent, seasonally adjusted, according to the Mortgage Bankers Association’s weekly survey.

The metric had fallen the previous week.

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“The ongoing strength in the housing market has carried into December,” said Joel Kan, MBA’s head of forecasting, in a statement. He pointed to record falling rates for the average 30-year, fixed-rate mortgage, noting that “homeowners once again acted on the decline in rates.”

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Kan attributed that to the rise of Covid-19 infections and uncertainty over further government stimulus.

Last week, the average rates for 30-year conforming loans fell to 2.85 percent, down from 2.90 percent. That’s a new low in the history of MBA’s weekly survey, which has been running since 1990. Jumbo rates also dropped, to 3.12 percent from 3.20 percent.

MBA’s index tracking the volume of refinance applications increased 1 percent last week. The index was up 105 percent year-over-year.

Refinance applications made up nearly 73 percent of the homes loans surveyed last week.

Despite both indexes reporting growth, the number of all home loans was largely flat last week compared to the previous one. MBA’s survey covers 75 percent of the residential mortgage market.