Mortgage refinance demand surged 40% higher after a brief social media post from President Trump caused a tank in interest rates. The post, made late Thursday, announced that Trump would order mortgage giants Fannie Mae and Freddie Mac to buy $200 billion in mortgage-backed bonds. This caused the average rate on the 30-year fixed to sink briefly below 6% Friday morning before bouncing slightly higher again, according to Mortgage News Daily. As a result, total mortgage application volume jumped 28.5% last week from the previous week, which was adjusted for the holiday, according to the Mortgage Bankers Association's (MBA) seasonally adjusted index. Refinance demand, which is most sensitive to daily rate changes, surged 40% higher for the week and was 128% higher than the same week one year ago. The average loan size for refinance applications was also higher, as borrowers with larger loan sizes are typically more sensitive to changes in rates, said Joel Kan, an MBA economist. Applications for a mortgage to purchase a home, which are less sensitive to sudden rate changes, increased 16% for the week and were 13% higher than the same week one year ago. Mortgage rates moved higher to start this week, according to Mortgage News Daily. They bounced Monday on the expectation of higher oil prices and then a little higher Tuesday. Matthew Graham, COO of Mortgage News Daily, wrote on Tuesday that things might have ended up worse today had it not been for a reasonably well-received CPI report (Consumer Price Index). This important data showed inflation remaining in check in December, with the most closely-watched metrics coming in just below the median forecast.
