Mortgage loan applications rose 11.3% to a level of 491.7 in the week ended Jan. 28, according to the Mortgage Bankers Association.
It was the biggest jump in 15 months for the housing gauge, which has averaged a level of 720.1 the past 10 years.
Last week’s reading may be high because seasonal adjustments failed to account for the Martin Luther King Jr. Day holiday.
“Applications increased this week relative to the holiday week,” said Michael Fratantoni, MBA’s vice president of research and economics. “Purchase applications are flat and refinance applications are down about 5% [the past two weeks].”
Refinancings were up 11.7% to 2261.2 and the purchase index rose 9.5% to a reading of 188.7 in the Weekly Mortgage Applications Survey released Wednesday, rebounding from the worst month for mortgage activity the past two years.
Despite the rise in applications, home buying is still hovering near the lowest levels of the past 15 years.
“Home sales remain moribund,” said Stephen Wood, chief economist at Insight Economics, noting that rising mortgage rates have removed some of the incentive for both home buying and refinancing.