More Proof Home-Buyer Demand Is Rising
Mortgage applications for home purchases rose last week for the third consecutive week, a fresh sign that home-buyer demand is increasing. Applications, which are viewed as a leading gauge of home-buying activity, were up 7 percent week-over-week and are now 12 percent higher than the same week one year ago, according to the Mortgage Bankers Association.
"Purchase mortgage application volume last week increased to its highest level since July 2013, spurred on by still-low mortgage rates and strengthening housing markets," says Mike Fratantoni, MBA's chief economist.
The MBA's seasonally adjusted mortgage application index showed that overall volume, including for purchases and refinancing, rose 0.4 percent week-over-week for the week ending April 3. The modest rise was due to a sluggish number of applications for refinancing last week.
Despite low mortgage rates, refinance applications dropped 3 percent from the previous week and are down 47 percent from last year's levels.
"Rates have been below 4 percent in 12 of the last 13 weeks," Fratantoni says. "However, so many borrowers have refinanced in recent years at very low rates, and they just are not responding to rates at this level. The refinance index has actually decreased in seven of the last 13 weeks despite rates fluctuating within a narrow range."
MBA reports that the 30-year fixed-rate mortgage averaged 3.86 percent last week, dropping from 3.89 percent the previous week.
Source: “Mortgage Applications Rise Points to More Homebuyers,” CNBC.com (April 8, 2015)
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