Overall mortgage application activity increased during the week ending May 4, as a greater number of prospective homebuyers found that financial stability required to own a home, the Mortgage Bankers Association reports.
According to the industry group's Weekly Application Survey, home loan activity rose 1.7 percent from the previous week. However, the overall increase was a result of more home buying activity, as refinancing edged lower.
The refinancing share of mortgage application activity, although still a majority, fell to 72.1 percent from 72.6 percent a week earlier. In addition, government initiatives, such as the Home Affordable Refinance Program and Home Affordable Modification Program, played a smaller role in refinancing, as the Government Refinance Index declined 2.3 percent.
Mortgage rates edge lower
Meanwhile, the rate for a 30-year fixed-rate mortgage with a conforming loan limit fell to 4.29 percent from 4.32 percent a week earlier, according to the report. In addition, the rate for a 30-year FRM jumbo loan fell to 4.01 percent from 4.05 percent during the same period. As a result of this decline, there could be even more mortgage application activity as housing market activity strengthens.
Delinquencies reach new three-year low
The home loan delinquency rate across the country recently fell to the lowest rate recorded since 2009 during the first quarter of this year, TransUnion reports. The rate of borrowers who were more than 60 days late fell to just 5.78 percent during the three-month period. This is the first time the rate has declined after increasing during the two previous quarters. Specifically, mortgage records indicate that the rate is 3.83 percent lower than the previous three-month period and 6.62 percent lower than the first quarter of 2011.
"To see that quarter-over-quarter, and year-over-year, more homeowners were able to make their mortgage payments is certainly welcome news," said TransUnion vice president of U.S. housing Tim Martin. "Before this, we saw two quarters of delinquency increases, and while we are still about three-times above the pre-recession norm, this should mark the start of consistent improvement each quarter."
This improvement in mortgage delinquencies is positive for both the housing market and mortgage industry, as both sectors struggle to find their footing during uncertain economic times.