Mortgage loan application rates reportedly increased up to 21 percent after the rush loan applications that happened toward the end of last year when the new regulation on loan applications was implemented, the latest report by Mortgage Bankers Association (MBA) stated. However, there was no continued rise because this week, the applications have dropped again.
MBA's vice president Lynn Fisher said, "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."
She explained that the increase itself was the result of the continuous growth in jobs and the continuous low [mortgage] rates at the end of the fourth quarter in 2015. These were already observed in the early December which suggested that there would be an expected strong finish of year for mortgage loan application.
Based from the report MBA shared, there is an increase of 76 percent from the composite index week over week. Over the end of the New Year, there was an increase of 18 percent from the seasonally purchase index. From the unadjusted purchase index, it has increased by 74 percent for the week and now with 19 percent higher year over year.
From the year over year basis, there was a 24 percent increase from the refinance index week over week which was the result of all the new mortgage loan rate application increase from the last week from 55.4 percent to 55.8 percent.
In the previous week, there was a 4.7 percent increase from the adjustable rate mortgage and 5.1 percent were accounted from the mortgage loans.
Last week's average mortgage loan rate conformed to the 30-year fixed-rate mortgage decreased from 4.20 percent to 4.12 percent. On the other hand, the rate for a jumbo 30-year fixed-rate mortgage decreased for 0.07 percent. Then the average interest rate for a 15-year fixed-rate mortgage also decreased from 3.46 percent to 3.42 percent.
Fisher stated, "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."
She warned the borrowers to keep updated with the new rules as the recent ones were already in effect last October of 2015 resulted to a rush of loan applications after it was implemented.
