According to the Mortgage Bankers Association’s weekly survey, mortgage applications in the U.S. rose 2.4 percent last week, with purchases gaining for the first time in three weeks, and refinances up as well.
The purchase index rose 2.1 percent, while refinance activity was up 2.7 percent from a week ago, though it’s unclear how many of the applications actually translate to fundings.
Quicken Loans Chief Economist Bob Walters was optimistic on the strength of application volume last week, noting that things would likely improve in the near term as credit restrictions eased to some degree.
“With the recent turmoil in the housing industry, the rise in purchase and refinance applications is definitely a welcome development,” Walters said.
“As credit restrictions slowly unwind, and consumers begin to take advantage of low interest rates and attractive loan programs, such as FHA loans, I’d anticipate a steady improvement in mortgage applications in the near term.”
Though loan applications were up, fixed interest rates also inched higher, with the average rate on a 30-year fixed mortgage at 6.40 percent, up from 6.32 percent, while the 15-year fixed rose from 5.95 to 6.03 percent.
Interest rates on one-year adjustable-rate mortgages dipped to 6.15 percent from 6.21 percent, while the total percentage of applications that were ARMs fell slightly from 13.8 to 13.6.
Applications to refinance loans made up 46.2 percent of the total volume, up from 46 percent the prior week, though falling home prices have made it increasingly difficult for homeowners with little equity in their homes to successfully complete a refinance.
The Mortgage Bankers Association’s weekly loan survey covers roughly half of all U.S. retail residential loan origination, and counts multiple applications as well as declined applications, which may skew the outlook.
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