Tumbling Rates Lead to Record Mortgage Applications

The number of mortgage applications taken last week surged to a level the industry hasn’t seen in nearly four years. The week ending January 11th saw a 28.4% spike in mortgage applications up to 906.4, the highest level since April 2, 2004.

Ever falling interest rates are the culprit; borrowing costs, excluding fees, averaged 5.62% down 0.11%. The lowest rates prior to last week were for the week ending July 1st, 2005, when rates hit lows of 5.58%, excluding fees.

This certainly seems like good news, but expectations are that the Fed will shoot for another interest rate cut at the end of this month of as much as 0.5%, if that ends up not happening, or the cut is less than expected, it’ll be a sign that the Fed’s worried about inflation, which could cause this trend of falling mortgage rates to reverse.

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