Borrowers are getting spooked by rising rates and, as a result, they’re rushing to lock in rates before any further increases. That’s pushing mortgage application volume higher, increasing a seasonally adjusted 3.3 percent week over week, the Mortgage Bankers Association reported Wednesday. Buyers are also increasingly turning to adjustable-rate mortgages to try to get more savings in their monthly payments too.
“Mortgage rates increased last week as remarks by several key Federal Reserve officials strongly signaled a March rate increase,” says Joel Kan, an MBA economist. “This was further supported by a few solid economic data releases, including GDP, inflation, and manufacturing gauges.”
The 30-year fixed-rate mortgage increased to 4.36 percent from 4.30 percent the previous week, the MBA reports.
The share of ARMs reached its highest level of mortgage applications since 2014. The average loan size for purchase applications also reached a survey high of $313,000, the MBA reports.
Refinance volume was up 5 percent last week. Applications for home purchases rose 2 percent higher for the week and are about 4 percent higher than a year ago, the MBA found.
The MBA says mortgage volume remains 18 percent lower compared to the same week a year ago. Volume is mostly lower from a year ago due to a significant decrease in refinance applications from a year ago when interest rates were lower. Refinance volume is down 34 percent annually, the MBA reports.
Source: “Borrowers Rush to Beat Rising Rates, Pushing Mortgage Volume 3.3% Higher,” CNBC (March 8, 2017)
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