According to the Mortgage Bankers Association’s latest Weekly Applications Survey, mortgage applications (for last week) were up 5.3 percent from the week before on a seasonally-adjusted basis. Refinance applications were up 2.7 percent from the week earlier, while purchase applications were up ten percent. The rise in applications for purchases were lead by a 17.6 percent increase in government purchase applications. Michael Fratantoni, VP of Research and Economics for the MBA commented:
“Purchase application volume jumped last week largely due to another sharp increase in applications for government loans. Borrowers were likely motivated to apply for loans before the scheduled increase in FHA insurance premiums. Refinance activity increased somewhat as rates dropped to their lowest level in a month towards the end of the week.”
The four week moving average for purchase applications is up 2.5 percent as we move into the spring buying season, while the four week moving average for refinancing is down 5.7 percent. Refis continue to make up a shrinking share of total mortgage origination activity, only accounting for 58.5 percent of all applications, down from 60.3 percent the week prior.
According the the MBA’s statistics, the average rate on a 30-year fixed rate mortgage fell from 4.98 percent to 4.83 percent last week, while the 15-year fixed rate mortgage rate dropped 10 basis points to 4.07 percent.
Despite the increase, this is not an especially strong report, as most of the gains last week were driven by the impending rise in FHA mortgage insurance. Ideally, we would like to see a greater uptick in purchase applications as we move into the home buying season. The housing market remains plagued by fears of diminishing home values and rising foreclosures, and I think these factors are keeping many buyers on the sidelines this summer.
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