Mortgage applications jumped considerably recently, likely due to concerns over rising interest rates.
In its last report of 2015, the Mortgage Bankers Association said that overall mortgage applications rose by 7.3 percent on a seasonally adjusted basis over the previous week for the period ending on December 18. The increases follows two consecutive weeks of relatively flat increases of just over 1 percent.
Earlier that week, the Federal Reserve voted unanimously to increase interest rates. Though their vote was only for 0.5 percent, concerns grew over across the industry and, apparently, for consumers as well.
As rates increase, many experts expect that applications to refinance, which have been strong in 2015 due to low rates, will drop considerably next year. It's no surprise, then, that the weeks jump in applications was spearheaded by an 11 percent increase for refinancing applications, a sign that consumers are rushing to take advantage of rates before the rise. The overall share of refinancing applications filed that week also grew, up to 62.8 percent from 60.7 percent from the week prior.
Purchase applications increased as well, up 4 percent week over week and 37 percent from the same week of 2014.
Included in the MBA's report was the first signs of the Fed's vote having an effect, as interest rates rose in all fixed rate categories.
The 30 year fixed rate mortgages for loan balances of $417,000 or less rose from 4.14. percent to 4.16 percent and from 4.01 percent to 4.04 percent for larger balances. FHA backed 30 year fixed rate mortgages went to 3.92 percent from 3.9 percent. The 15 year fixed rate mortgage showed the largest increase, going from 3.3 percent to 3.45 percent, it's highest since last October.
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