Jan. 13 (UPI) -- An industry report Wednesday indicates that more potential U.S. homebuyers are applying for loans, perhaps to grab onto record low mortgage rates before they move too far in the other direction.
Mortgage applications surged 20% last week in response to a slight rise in rates, the Mortgage Bankers Association said in its weekly assessment.
The average rate for 30-year fixed-rate mortgages inched up 0.02% week-to-week.
The MBA said the increase, 99 basis points higher than a year ago, was enough to help the spur of applications.
Application volume is 93% higher than it was a year ago.
"Booming refinance activity in the first full week of 2021 caused mortgage applications to surge to their highest level since March 2020, despite most mortgage rates in the survey rising last week," Joel Kan, MBA's associate vice president of economic and industry forecasting, said in a statement.
"The expectation of additional fiscal stimulus from the incoming administration, and the rollout of vaccines improving the outlook, drove Treasury yields and rates higher.
Refinancing activity increased more than 1% and the adjustable-rate share of activity fell to 1.6% of total applications.
Matthew Graham, chief operating officer at Mortgage News Daily, said the slowly rising rates may be changing attitudes among homebuyers.
"For now, an air of mortgage rate invincibility and persistent setting of new record lows has been replaced by a healthy respect for what may be the first stage of a rising rate environment, the first time we've seen such a thing since 2018," he said.