Mortgage Applications Explode Higher As Rates Tumble, Shutdown Loomed

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Seemingly encouraged by the dramatic slide in mortgage rates into the end of the year (and perhaps incentivized ahead of the shutdown that impacted IRS’ ability to income-verify), US mortgage applications exploded 23.5% last week, with both purchase and refinancing applications rising sharply.

Refinancing applications jumped 35.3% (up 80.4%, unadjusted). While some of the spike reflects seasonal noise, part of the increase is likely due to actual activity given the recent decline in mortgage rates.

Mortgage rates declined sharly last week. The effective rate on a conventional 30-year loan declined nine basis points to 4.88%, the lowest since April. As Oxford Economics points out,

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