The decrease in mortgage activity by the end of 2015 was apparently just temporary. According to the Mortgage Bankers Association, the mortgage application volume increased 21.3 percent just last week, as compared to the previous week, which was on "a seasonally adjusted basis."
As it turns out, the tally for the previous week was adjusted for the New Year's holiday season. Back in December, mortgage application were constantly fluctuating, since some borrows hurried to file applications earlier in the month just in case of a possible Federal Reserve mortgage rate hike.
MBA's vice president of research and economics Lynn Fisher explains, "The good news for the new year is that following the holidays, application activity last week resumed at levels just exceeding those observed during early December, suggesting that the purchase market has picked up right where it left off."
Not only that, but the statistics on mortgage applications seem to indicate that home buying may increase as the new year begins. CNBC reports:
"Mortgage applications to purchase a home increased 18 percent from the previous week, seasonally adjusted, and were 19 percent higher than the same week one year ago. This signals an increase in potential home buying at the start of the year. New listing usually begin to increase just after the holidays."
"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 Fisher.
The new rules, which are intended to protect borrowers, have been getting the blame for "delays in closings." Meanwhile, some others claim that the rules were the reason behind the sharp drop in closed sales back in November.
Borrowers had already been warned about the rules, which is probably why there was huge rush in loan applications before it became effective in October.