Applications rise due to ‘catch-up activity’ after holidays

  • U.S. mortgage refinance demand surges by nearly 20% after holiday period
  • Applications rose in part due to ‘catch-up activity’ after holidays
  • Mortgage rates did not dampen home-buying and refinancing demand
  • Overall market composite index increased by 9.9% from a week ago
  • Purchase index rose 5.6% from a week ago
  • Refinance index increased by 18.8%, with government-backed loans rising nearly 30%
  • Average contract rate for the 30-year mortgage increased to 6.81%
  • Pent-up demand from the holiday season likely pushed demand for refinancing higher
  • Home-buying demand only rose modestly
  • Housing inventory remains constrained

Mortgage applications in the U.S. surged by nearly 20% after the holiday period, driven by ‘catch-up activity’ from home buyers. Despite rising mortgage rates, demand for home-buying and refinancing remained strong. The overall market composite index increased by 9.9% from the previous week, indicating a robust market. The purchase index rose by 5.6%, while the refinance index saw a significant increase of 18.8%, with government-backed loans rising by nearly 30%. Although home-buying demand only rose modestly, the pent-up demand from the holiday season likely contributed to the surge in refinancing. However, with housing inventory remaining constrained, it remains to be seen if the interest will be sustained as rates continue to rise.

Public Companies: Mortgage Bankers Association (MBA)
Private Companies:
Key People: Joel Kan (Vice President and Deputy Chief Economist at the MBA)

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Factuality Level: 7
Justification: The article provides specific data and quotes from the Mortgage Bankers Association to support its claims about the increase in mortgage applications. However, it does not provide any counterarguments or alternative perspectives, which could potentially lead to a biased view of the situation.

Noise Level: 3
Justification: The article provides relevant information about the increase in mortgage applications despite rising rates. It includes key details such as the rise in purchase and refinance activity, average contract rates, and the perspective of the Mortgage Bankers Association. However, the article lacks in-depth analysis, scientific rigor, and actionable insights. It also includes unrelated information about the yield on the 10-year Treasury note, which is not directly related to the topic.

Financial Relevance: Yes
Financial Markets Impacted: Mortgage market, housing market

Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article discusses the increase in mortgage applications and refinancing activity despite rising mortgage rates. This information is relevant to the financial markets, specifically the mortgage and housing markets.

Reported publicly: www.marketwatch.com