For many people living in colder climates, the first day of spring brings hope of warm weather. However, the latest Mortgage Bankers Association Weekly Mortgage Applications Survey revealed that the season change may have influenced prospective buyers of homes for sale across the country to apply for a mortgage loan. Data for the week ending revealed activity increased 7.7 percent from the week before.
That figure is a seasonally adjusted measure, and applications rose 8 percent according to the Market Composite Index when unadjusted. Buyer activity improved, as shown by MBA's seasonally adjusted Purchase Index, which rose 7 percent from the previous week and jumped 7 percent when unadjusted. While the gains are relatively marginal, the PI was 10 percent higher than application activity seen this time a year ago. Economists and other housing market professionals consider annual improvements to be a better indication of real recovery and stability, as small economic factors can alter month-over-month and weekly results.
Prospective buyers aren't the only consumers taking advantage of affordable interest rates that are expected to last throughout 2013, as current homeowners refinancing their initial mortgages continue to account for 75 percent. The refinance share of applications was unchanged from the last weekly report, but the Refinance Index rose 8 percent on a weekly basis.
News of increased activity comes after a rough start in March, when applications went south but saw casual recoveries throughout the third month of the year. Economists predict that once the inventory of homes for sale grow nationwide that more applications will come in, as some buyers may not be interested in making the investment when the variety of types of properties is limited.
Fixed-rate mortgage remain the most popular selection for mortgage types amongst both buyers and those refinancing, and the report revealed that the adjustable-rate mortgage share of total applications slipped to account for just five percent of total activity.
In Freddie Mac's most recent Primary Mortgage Market Survey, mortgage rate averages rose from the week before, for both FRMs and ARMs. While this could deter some buyers and hopeful refinancing applicants from making a move in the real estate industry, rates are still lower than they have been in years, and they aren't expected to rise above 4 percent in 2013.