US mortgage refinancing activity rebounded strongly last week. Mortgage Bankers Association (MBA) data showed that the refinance index increased by 11.4 percent in week ended Jan. 29 (v -5.0 percent w/w prior). US mortgage refinancing activity reached the highest since March 2020 and was up 59.5 percent compared to the same week one year ago.
Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, said “after increasing for three consecutive weeks, the 30-year fixed mortgage rate dropped 3 basis points to 2.92 percent. The one-week reversal in the recent upswing in rates drove an increase in both conventional and government refinance activity, as borrowers continue to lock in these historically low rates“. The rebound in refinancing activity will be another tailwind for households after the Congress passed a $900 billion stimulus in December.
In the meantime, demand from homebuyers rose slightly. On a seasonally adjusted basis, purchase applications increased by 0.1 percent last week (v -4.0% percent prior). Average purchase loan amounts kept rising across all loan types supported by limited housing inventory and accelerating home price growth.
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