Mortgage applications spike, biggest gain in six years

mortgage applications

mortgage applicationsBy Diana Olick | CNBC

A sharp drop in interest rates, combined with new reduced costs for the market’s most popular mortgage products, sent mortgage applications soaring last week.

Total volume increased 49.1 percent from the previous week on a seasonally adjusted basis, according to a weekly survey by the Mortgage Bankers Association (MBA) for the week ending January 9, 2015.

The jump was fueled by a seasonally adjusted 66 percent increase in applications to refinance, which are now at the highest level since July 2013. Applications for interest-rate-sensitive jumbo refinances more than quadrupled from the previous week.

Applications for a loan to purchase a home rose a seasonally adjusted 24 percent from the previous week and are now two percent higher than they were a year ago, the first annual gain in over a year. A new 3 percent down payment loan option at Fannie Mae for borrowers with high credit scores contributed to the gain, according to the MBA.

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