Homeowners who have been hesitant to refinance their mortgages are now running as mortgage rates creeped up last week. Going from 2.86% to 2.88% last week, the average contract interest rate for 30-year fixed-rate mortgages increased enough to motivate homeowners to refinance. Mortgage applications to refinance a home loan jumped 20% last week compared to the previous week, reports CNBC. That spike was the highest level of refinancing applications since March and 93% higher than exactly one year ago. Mortgage Bankers Association’s vice president of economic and industry forecasting says the rate uptick is a result of stimulus checks and the promising future of vaccines.
Mortgage applications to purchase a home, which are less sensitive to weekly rate moves, rose 8% for the week and were 10% higher than a year ago. While demand for housing is still strong, the annual comparison was lower than it has been over the past six months, as buyers are faced with a record low supply of homes for sale and fast-rising prices. However, there was a promising sign in the numbers for first-time buyers.