The recent release of an employment report showing strong growth may be the key behind the rise in mortgage applications last week, CNBC reports. The strengthening jobs report offers a greater likelihood that the Federal Reserve will decide to raise interest rates next week, prompting home owners and buyers to rush to secure rates now.
Total mortgage applications—for refinancings and home purchases together—rose 1.2 percent on a seasonally adjusted basis for the week ending Dec. 4 compared to the previous week, the Mortgage Bankers Association reports. Broken out, refinance volume – which tends to be the most rate-sensitive – increased 4 percent week-to-week, while applications for home purchases inched up 0.04 percent. Purchase volume is 29 percent higher than the same week one year ago, a strong indication of more home sales.
“This year’s housing market is poised to be the best since 2007; however, consumers’ ability and willingness to purchase a home is likely to remain an issue in many regions going forward until we see consumer confidence in their income growth consistently gain traction,” wrote Fannie Mae chief economist Doug Duncan in a recent report.
Source: “Weekly Mortgage Applications Up 1.2%,” CNBC (Dec. 9, 2015)