US mortgage applications jump at the start of the year

US mortgage applications jumped sharply at the start of the year, suggesting that strength in the market for loans for home purchase at the end of last year carried through into 2015.

In seasonally adjusted terms, the Mortgage Bankers Association’s composite index for mortgage applications rose by 21.3% versus the week before, led by a 24% rise in applications for mortgage refinancings, while those for home purchases jumped by 18%.

“MBA's purchase mortgage application index reached its second highest level since May 2010 on a seasonally adjusted basis last week, second only to the week prior to the implementation of the Know Before You Owe rules," said Lynn Fisher, MBA's Vice President of Research and Economics.

"Bolstered by strong fourth quarter growth in jobs and continuing low rates, the results are similar to levels we saw in early December, suggesting that the purchase market's strong finish to 2015 may be continuing.”

However, refinance activity was down by 38% relative to a year ago when rates dove below 4%," Fisher added.