Despite a solid gain in mortgage rates last week, home buyers and refinancers were not deterred. Mortgage application volume, which reflects demand for home purchases and refinancings, increased 4 percent last week over the previous week and on a seasonally adjusted basis, the Mortgage Bankers Association reported Wednesday.
Last week, mortgage applications for home purchases increased 6 percent compared to the previous week. Purchase applications are just 0.1 percent higher than a year ago.
"Although it is still early in the homebuying season, purchase activity remains on par with a year ago, suggesting that recent wage growth of nearly 3 percent is helping to offset the increase in interest rates,” says Lynn Fisher, the MBA's vice president of research and economics. “This trend is also consistent with other reports of homebuying activity. "
Meanwhile, refinance volume last week saw a more modest gain, up just 0.2 percent for the week on a seasonally adjusted basis.
Mortgage rates were volatile last week, the MBA reported. Rates moved up and down based on daily news reports. That said, the MBA reported the average interest rate for a 30-year fixed-rate mortgage last week rose to 4.35 percent from 4.27 percent the prior week.
"While this was the first rate increase in January, rates remain about 10 basis points lower than four weeks ago,” Fisher says.
Source: “Jump in Rates Doesn’t Deter Homebuyers, as Mortgage Applications Increase 4%,” CNBC (Jan. 25, 2017)