Demand for mortgages jumps by almost 28% in one week, as interest rates drop to their lowest point in months

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Mortgage rates are at their lowest level since September, which brings new demand to the mortgage market.
The average contract interest rate for 30-year fixed-rate mortgages decreased last week to 6.23% from 6.42%.
Applications for mortgages to purchase housing increased by 25% from week to week, but were 35% lower than the same week a year ago.
Consumers have returned from the holiday season to find mortgage rates at their lowest point since September, and they're responding in dramatic fashion.
The volume of mortgage applications jumped last week by almost 28% compared to the previous week, according to the seasonally adjusted index of the Mortgage Bankers Association.
The average contract rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) fell to 6.23% from 6.42%, with points falling to 0.67 from 0.73 (including origination fee) for loans with 20 down % advance payment.
Rates hit a recent high of about 7.2% in late October in the MBA survey, but ended the year at 6.58%. A year ago, the average rate on a 30-year fixed was 3.64%.
Demand for refinancing made the biggest move, up 34% from the previous week, but it was still 81% lower than the same week a year ago. The recycling share of mortgage activity rose to 31.2% of total applications from 30.7% the previous week.
Applications for a mortgage to purchase an apartment increased by 25% from week to week, but were 35% lower than the same week a year ago.
"As we enter the start of the spring buying season, lower mortgage rates and more homes on the market will help make prices affordable for first-time home buyers," said Mike Frattentoni, senior vice president and chief economist at MBA.
The market, however, does not see any increase in inventory. The number of active listings is about 21% higher than it was a year ago, according to Redfin, a real estate brokerage. This is mainly because homes are now on the market longer, with far fewer sales. New home listings for sale are down 22% year over year.

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