Mortgage applications increased at the end of January as interest rates fell across all residential loan categories. The drop, which continued defying expectations for the start of the year, led to an increase in mortgage demand, particularly in refinance activity which is generally more sensitive to interest rate fluctuations.Refinance activity may be down 30 percent from where it was in January of last year, but as most economists are predicting a steady rise in interest rates throughout this year, borrowers looking at still historically low rates perceive this as their last chance to seize on the opportunity to lower their mortgage cost.Mortgage rates are being affected by volatility in the financial market. As a result, rates have decreased 18 basis points since the first week of January 2016, bringing rates at their lowest point since last October. 30-year fixed-rate mortgages with conforming loan balances (loans up to $417,000) and 80 percent loan-to-value ratios, decreased to their lowest level since October, 4.02 percent, from 4.06 percent, with points decreasing to 0.40 from 0.41.Homebuyers are not as sensitive to rate fluctuations. They have a different problem to face which still remains the extremely low inventory of available properties on the market, rising home prices which are making most neighborhoods in or around Boston untouchable by most and very high rents to pay. Home sales rebounded in December, but primarily due to transactions that should have closed in November and were delayed by the new mortgage rules.
