Mortgage applications in the US rose by more than 20 percent last week, driven by a surge of refinancing demand as interest rates decreased, according to a Mortgage Bankers Association (MBA) survey.
The seasonally adjusted mortgage application index that includes both home purchase demand and refinancing climbed 23.1 percent in the week ended 13 January.
The seasonally adjusted refinance application index jumped 26.4 percent, while the barometer of loan requests for home purchases climbed 10.3 percent.
“With mortgage rates reaching new lows, refinance volume jumped,” said Michael Fratantoni, Vice President of Research and Economics at MBA.
“Purchase activity also increased as buyers returned to the market after the holiday season.”
The proportion of refinance in the total mortgage activity increased to 82.2 percent from 80.8 percent in the previous week, making it the largest refinance share since October 2010.
Meanwhile, fixed 30-year mortgage rates averaged 4.06 percent, decreasing five basis points from 4.11 percent.
The survey covered over 75 percent of US retail residential mortgage applications.
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