Mortgage Applications Rise Dramatically

It seems that the 2016 housing market is off to a fast start, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Jan. 8.

The Market Composite Index took a 21.3 percent climb on a seasonally adjusted basis and skyrocketed 76 percent on an unadjusted basis compared with the previous week. The seasonally adjusted Purchase Index increased 18 percent, while and the unadjusted Purchase Index increased 74 percent compared with the previous week and was 19 percent higher than the same week one year ago.

The Refinance Index increased 24 percent from the previous week while the refinance share of mortgage activity increased to 55.8 percent of total applications from 55.4 percent the previous week. And the government loan programs saw relatively minimal activity: the FHA share of total applications decreased to 14.4 percent from 14.6 percent and the VA share of total applications decreased to 12.2 percent from 12.9 percent the week prior, while the USDA share of total applications increased slightly to 0.8 percent from 0.6 percent.

“MBA’s purchase mortgage application index reached its second highest level since May 2010 on a seasonally adjusted basis last week, second only to the week prior to the implementation of the Know Before You Owe rules,” said Lynn Fisher, MBA’s vice president of research and economics. “Bolstered by strong fourth quarter growth in jobs and continuing low rates, the results are similar to levels we saw in early December, suggesting that the purchase market’s strong finish to 2015 may be continuing. While refinances also increased on a holiday-adjusted basis, refinance activity was down 38 percent relative to a year ago when rates dove below four percent.”