The volume of mortgage applications in the US rose by 14.1% from the previous week in the period ending January 16th, extending the 28.5% surge in the previous period, according to data compiled by the Mortgage Bankers Association. The sharp back-to-back increases were aligned with lower mortgage rates, with the rate on a benchmark 30-year mortgage dropping to a 16-month low of 6.16%. The surge took place despite some stubbornness in long-dated Treasury yields after US President Trump stated he would order the Fannie Mae and Freddie Mac to buy $200 billion in mortgage-backed securities. Applications for contracts to refinance a mortgage, which are sensitive to short-term changes in interest rates, rose by 20% from the previous week. Meanwhile, applications for a mortgage to purchase a new home rose by 5%.
