Mortgage application activity down, rates at standstill

Buyers took advantage of affordable rates and economic improvements in 2012, as apparent when looking at sales figures and the depleted inventory of existing homes for sale. Throughout the first two months of 2012, however, applications have been fluctuating a significant amount as seen in the Mortgage Bankers Association's Weekly Mortgage Applications Survey.

Buyers took advantage of affordable rates and economic improvements in 2012, as apparent when looking at sales figures and the depleted inventory of existing homes for sale. Throughout the first two months of 2012, however, applications have been fluctuating a significant amount as seen in the Mortgage Bankers Association's Weekly Mortgage Applications Survey.

Data for the week ending February 15, the Market Composite Index fell 0.6 percent from the previous week. While this is not a significant change, economists credit a low inventory of available homes and strict lending regulation for lower activity so far this year. 

The Purchase Index dropped 1.7 percent from the week before when measure on a seasonally adjusted basis despite record affordability for first-time buyers. As economic factors including job opportunities and incomes improve, more buyers are expected to make the investment and understand the benefits of homeownership.

Current homeowners have continued to account for a large majority of applications. The Refinance Index did decrease on a week-over-week basis for the second full week of February by 1.6 percent.

Between those refinancing and buying, fixed-rate mortgages continue to be favored, as MBA noted only 4.2 percent of total applications were for adjustable-rate mortgages. While MBA's reports on mortgage rates recorded an increase to 3.78 percent from 3.75 percent the week before. The average rate for 5- and 1-year ARMs remained at 2.66 percent.

A secondary mortgage rate report from Freddie Mac recorded the average rate for 30-year FRMs at 3.53 percent for the week ending February 14, significantly lower than the 3.87 percent average from the same time a year earlier. The government-sponsored enterprise's Primary Mortgage Market Survey also revealed the 2.77 percent average rate for 15-year FRMs remained notably lower than the 3.16 percent average from the year before.

Average rates for ARMs continue to approach levels seen this time last year, when reviewing Freddie Mac real estate records.

Applications could see a boost come spring when more buyers and sellers are active. The economic recovery will continue to positively influence the national housing market, and though rising home prices may not seem ideal for those looking to buy, they are indicative of a healthier market for both buyers and sellers. Those looking to purchase a home are urged to work with a professional for a quick and reliable process.



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