Mortgage applications rose for the third week in a row as borrowers reacted to low mortgage rates.
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Refinancing saw a jump in activity, increasing 5 percent from the previous week and was 207 percent higher than the same week a year ago.
The refinance share of mortgage activity increased to 65.5 percent of total applications from 64.5 percent in the prior week.
“The refinance index climbed to its highest level since June 2013, and refinance loan sizes also increased as a result of an active jumbo lending market,” Mortgage Bankers Association Associate Vice President Joel Kan. “Last month was the strongest January for purchase applications since 2009, which is perhaps a sign that mild weather brought out prospective buyers earlier than normal."
The 30-year fixed-rate mortgage increased slightly to 3.72 percent from 3.71 percent.
Demand for mortgages increased 1.1 percent from the prior week, according to the MBA's Weekly Mortgage Application Survey.
The seasonally adjusted purchase index rose 6 percent from last week, which may have been boosted by mild weather encouraging prospective buyers to come out.
The survey covers over 75 percent of all U.S. retail residential mortgage applications and has been conducted weekly since 1990.