After a brief pause for the presidential election, mortgage applications are now back to booming. For the week, mortgage applications to purchase a home jumped 4%, reports CNBC. Demand fell around election time but now remains 26% higher annually. A Mortgage Bankers Association vice president says the resurgence of mortgage demand comes from ongoing job recovery and buyers still seeking more space due to the pandemic. Mortgage rates also play a factor. The average contract interest rate for 30-year fixed-rate mortgages with balances of $510,400 or less remains below 3%, but increased to 2.99% from 2.98%.
Low rates are also keeping applications to refinance a home loan well above year-ago levels. Those applications were down slightly, 2%, for the week but were 98% higher than the same week one year ago. Thousands of borrowers have already refinanced, especially those with higher loan balances who stood to save more when rates dropped earlier this year.
“The refinance index decreased last week — driven by sharp declines in FHA and VA applications — but remained a robust 98 percent above a year ago,” Kan said, adding that the average refinance loan balance of $291,000 last week was the lowest since January.