February 16th, 2020 10:51 AM by Jackie A. Graves, President
The Refinance Index
climbs to the highest level since 2013
Typically, spring homebuying season starts in earnest as the
calendar ticks toward March, but homebuyers are seemingly getting
an earlier start this year, perhaps driven into the market by low mortgage
Now, a new report from the Mortgage Bankers Association shows
that spring homebuying season officially began in January this year.
According to the MBA, January 2020 was the strongest January for
purchase mortgage applications in 11 years.
Applying for a mortgage is considered the first official step in
the homebuying process, so applications being up in January to an 11-year high
indicates that buyers are ready and willing to buy now.
And the increase in mortgage applications has continued into
The report also showed that mortgage applications rose 1.1% in the
last week from one week prior, marking the third
consecutive week of increases, according to a seasonally adjusted index from
“The mortgage market continues to be active in early 2020, as
applications increased for the third straight week,” said Joel Kan, MBA’s
associate vice president of economic and industry forecasting. “Rates
also rose, but still remained close to their lowest levels since October
And people aren’t just moving to buy houses either. They’re also
continuing to refinance at record rates.
According to the MBA, the Refinance Index climbed 5% to its
highest level since June 2013, Kan said. Compared with a year earlier, it was a
whopping 207% higher this year.
The refinance share of mortgage activity increased to 65.5% of all
mortgage applications compared to last week’s 64.5%, the MBA report said.
The Purchase Index declined by 6% this week, but activity was
still up almost 16% percent from a year ago, Kan said.
“Last month was the strongest January for purchase applications
since 2009, which is perhaps a sign that mild weather brought out prospective
buyers earlier than normal,” Kan said. “Despite a decline last week, purchase
activity was still up almost 16% from a year ago.”
Here is a more detailed breakdown of this week’s mortgage application
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