Tags: Mortgage | Applications | Fed Rate Hike | Home Loans

Mortgage Applications Surge 7.3 Percent as Fed Hikes Rates

Image: Mortgage Applications Surge 7.3 Percent as Fed Hikes Rates

By    |   Wednesday, 23 Dec 2015 11:24 AM

 
Mortgage applications increased 7.3 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.

The Market Composite Index, a measure of mortgage loan application volume, increased 7.3 percent on a seasonally adjusted basis from one week earlier. The refinance share of mortgage activity increased to 62.8 percent of total applications from 60.7 percent the previous week.

The average contract interest rate for 30-year fixed-rate mortgages increased to 4.16 percent from 4.14 percent. The average contract interest rate for 15-year fixed-rate mortgages increased to 3.45 percent, the highest level since October 2014.

To be sure, CNBC and The Street's Jim Cramer expects hopeful home buyers to beat a path to banks' doors.

"I think this is the beginning of perhaps a rush -- before people realize that rates are about to go up," Cramer said. "I expect there to be a spurt of home buying." 

The Fed lifted its key interest rate by a quarter point to a range of 0.25 to 0.5 percent, up from near zero for the first time since December 2008.

"Borrowers may have been spurred to act by the potential for future rate increases from the Fed, which are more likely to be reflected in higher mortgage rates over time," Mike Fratantoni, the association's chief economist, told CNBC.

Lenders are making more credit available as the market has been shifting away from refinancing and toward purchases. "You're seeing that there is a real intent from the secondary market to embrace new consumers and help them largely through education," Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae, told CNBC.

"We are starting to see the re-emergence of programs that are not getting back to where we were before in the pre-bubble burst market from a credit-worthiness perspective, but you are starting to see the program normalize a little bit and get back to allowing more people availability to own homes," Tyrrell said.

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Mortgage applications increased 7.3 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending December 18, 2015.
Mortgage, Applications, Fed Rate Hike, Home Loans
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2015-24-23
Wednesday, 23 Dec 2015 11:24 AM
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