There was a surge in mortgage application activity during the week ending April 13, as conditions in the housing market continued to stabilize throughout the country.
According to the Mortgage Bankers Association's Weekly Applications Survey, activity rose 6.9 percent from the previous week, as a growing number of current homeowners opted to refinance their mortgages into more affordable monthly payments.
"Renewed concerns about sovereign debt in Europe led to a drop in rates last week, with the 30-year rate tying our survey low, reached in early February," said MBA senior vice president of research and education Jay Brinkmann. "Refinance activity picked up in response, increasing 13.5 percent for the week."
As a result in the upswing in demand, refinancing demand accounted for an estimated 75.2 percent of all mortgage application activity, up from 70.5 percent a week earlier. Meanwhile, as borrowers continue to utilize government initiatives, such as the Home Affordable Refinance Program and Home Affordable Modification Program, mortgage records indicate that 32 percent of the total refinancing volume were for HARP loans.
Conditions throughout the housing industry continued to stabilize during the first quarter of 2012. As mortgage demand continued to grow, so did activity in the home construction industry. Real estate data from the National Association of Home Builders found that single-family housing production remained relatively unchanged in March.
"While more consumers appear to be seriously considering a new-home purchase, builders remain very cautious about starting new projects until they see more actual sales materializing," said NAHB chairman Barry Rutenberg. "At the same time, in places where buyers are ready to go forward with a purchase, access to credit for both builders and buyers and difficulties in obtaining accurate appraisals are persistent challenges that continue to slow that process considerably."
In contrast, while single-family starts remained stable, the multifamily sector reported a 16.9 percent decline in activity due to the lack of available credit for prospective builders. As a result, overall housing starts were pushed 5.8 percent lower.
Regionally, the report indicated that the South had the biggest decline in combined activity, falling 15.9 percent, while the Northeast marketplace saw a 32.8 percent gain. Meanwhile, the Midwest saw a 1 percent increase, while the West remained unchanged in March from the previous month.