{"id":23890,"date":"2016-01-14T15:02:44","date_gmt":"2016-01-14T21:02:44","guid":{"rendered":"http:\/\/news.medill.northwestern.edu\/chicago\/?p=23890"},"modified":"2016-01-14T15:02:44","modified_gmt":"2016-01-14T21:02:44","slug":"fed-rate-hike-spurs-jump-in-mortgage-applications","status":"publish","type":"post","link":"https:\/\/news.medill.northwestern.edu\/chicago\/fed-rate-hike-spurs-jump-in-mortgage-applications\/","title":{"rendered":"Fed rate hike spurs jump in mortgage applications"},"content":{"rendered":"

By Xiumei Dong<\/strong><\/p>\n

Mortgage applications jumped last week, a trade group reported Wednesday, as consumers rushed to refinance their homes before interest rates move higher.<\/p>\n

For the week ending Jan. 8, total applications increased 21.3 percent from the previous week on a seasonally adjusted basis, according to the Mortgage Bankers Association survey, reaching the second highest level since May 2010.
\n<\/p>\n

The latest week\u2019s upturn was amplified in part because holiday downtime softened mortgage activity, the MBA noted.<\/p>\n

\u201cThe good news is that following the holidays, application activity last week resumed at levels just exceeding those observed during early December, suggesting that the purchase market has picked up right where it left off,\u201d Lynn Fisher, MBA vice president of research and economics, said in an email.<\/p>\n

Applications for refinancing existing home loans increased 24 percent, while mortgage applications to purchase a home added 18 percent from the previous week. Fisher said purchase activity was particularly strong in the fourth quarter of 2015, compared to the year-ago quarter. The Federal Reserve has kept interest rates extremely low ever since the U.S. economy went into a tailspin in 2008.<\/p>\n

30-Year Fixed Rate Mortgage Since 2008 <\/h2>\n

[field name=”mortgagechart”]<\/p>\n

Mortgage rates have been consistently low since 2008. Rates hit their low point in 2012, when the 30-year mortgage was 3.66 percent. (Xiumei Dong\/MEDILL)<\/div>\n

\u201cSince we have experienced historically low interest rates for several years, many homeowners have already refinanced their higher-rate loans,\u201d Fisher noted.<\/p>\n

Those who haven\u2019t locked in the low rates appear to be moving now, the MBA data suggests. With the economy\u2019s recovery, the U.S. central bank has raised interest rates by a quarter percentage point and pledged a gradual pace of future increases.<\/p>\n

Last week, the average interest rate on 30-year fixed-rate mortgages on conforming loans declined to 4.12 percent from 4.20 percent, which was the highest since mid-July.<\/p>\n

That decline doesn\u2019t mean the recent rise in mortgage rates is done. \u201cWeekly change are not very informative, (because) it doesn\u2019t tell you about the general trend,\u201d said Charles Nathanson, assistant professor of finance at the Kellogg School of Management at Northwestern University.<\/p>\n

From a historical perspective, experts point out, mortgages remain ultra-cheap. \u201cAnything under 5 percent is phenomenal,\u201d said Nick Parisi, senior vice president for the mortgage division at Standard Bank and Trust. He noted the recent increase of Fed’s rate pushes people to take the loans promptly.<\/p>\n

\u201cRates are good, housing price is stable, and more people are going back to work,\u201d said Parisi.<\/p>\n

Photo at top: Mortgage interest rates on display outside the First American Bank in Chicago. (Xiumei Dong\/MEDILL)<\/div>\n","protected":false},"excerpt":{"rendered":"

By Xiumei Dong Mortgage applications jumped last week, a trade group reported Wednesday, as consumers rushed to refinance their homes before interest rates move higher. For the week ending Jan. 8, total applications increased 21.3 percent from the previous week on a seasonally adjusted basis, according to the Mortgage Bankers Association survey, reaching the second […]<\/p>\n","protected":false},"author":228,"featured_media":23929,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,585],"tags":[692,690,691],"class_list":["post-23890","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-winter-2016","tag-housing-market","tag-interest-rates","tag-mortgage-rates"],"yoast_head":"\nFed rate hike spurs jump in mortgage applications - Medill Reports Chicago<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/news.medill.northwestern.edu\/chicago\/fed-rate-hike-spurs-jump-in-mortgage-applications\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fed rate hike spurs jump in mortgage applications - Medill Reports Chicago\" \/>\n<meta property=\"og:description\" content=\"By Xiumei Dong Mortgage applications jumped last week, a trade group reported Wednesday, as consumers rushed to refinance their homes before interest rates move higher. 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