Demand on the way up
Demand for mortgages on purchases of homes rose for the third consecutive week last week while applications for refinancing decreased, according to The Mortgage Bankers Association’s (MBA’s) seasonally adjusted index of overall mortgage application activity. Overall, the index fell 2.4 percent, but looking just to demand for home purchases, a 4.4 percent increase from the previous week was measured.
“Applications for home purchase increased again last week, coinciding with another strong job market report. Purchase applications are now almost 12 percent above the level one month ago, even after adjusting for typical seasonal patterns,” said MBA’s Vice President of Research and Economics, Michael Fratantoni.
Fratantoni added, “However, this level of purchase activity, adjusted or unadjusted, was essentially unchanged when compared to the same time last year. Purchase activity remains subdued and within the narrow range we have seen since the expiration of the homebuyer tax credit in 2010.”
From the previous month, application volume rose 18.0 percent in February, while it remains 2.0 percent below February 2011. Refinance loans now account for 75.1 percent of applications, continuing the volume slide.
“Refinance application volume fell last week,” Fratantoni said. “Although rates were unchanged on average, they trended up through the course of the week, and this likely discouraged many potential refinance applicants. HARP volume continued to grow as a share of total refinance volume, reaching roughly 30 percent of refinance activity in the last two weeks. Typical HARP loans had loan-to-value ratios above 90 percent, indicating that lenders are reaching out to underwater borrowers.”
Fixed 30-year mortgage rates remained at an average 4.06 percent.
Photo courtesy of Tim Pierce.