Mortgage applications see slight dip in last week of March

Following a jump of nearly 8 percent during the preceding week, mortgage applications saw a 4 percent decline during the period ending March 29, Mortgage Bankers Association reported.

Though the national housing market has repeatedly shown signs of considerable strengthening, premium increases implemented by the Federal Housing Administration (FHA) may have caused fewer consumers to pursue homeownership recently. Following a jump of nearly 8 percent during the preceding week, mortgage applications saw a 4 percent decline during the period ending March 29, Mortgage Bankers Association (MBA) reported in its most recent Weekly Mortgage Applications Survey.

On April 1, the FHA introduced its third increase in mortgage insurance premiums in two years, reportedly raising the required minimum by about $130 per month. Hoping to avoid having to pay additional fees upon confirmation, a number of hopeful homeowners may have previously submitted their applications, causing the sizable uptick seen mid-March, but a slight drop last week. The Refinance Index saw a week-over-week decline of 6 percent, while mortgage records show the refinance share of activity decreased from 75 to 74 percent of total applications.

Amid the small drops, MBA noted its Purchase Index increased during the week. The seasonally adjusted index moved up 1 percent from levels observed the week prior, while the unadjusted index showed a 2 percent weekly increase.

"Total purchase applications increased last week, due to an almost 7 percent increase in purchase applications for government loans," said Mike Fratantoni, vice president of research and economics for MBA. "This was likely driven by borrowers applying for loans prior to the scheduled increase in FHA premiums that took effect on April 1. On a year over year basis, purchase applications are up about 4 percent, in line with the trend we are seeing in home sales volumes."

Constrained inventory sees decrease in pending sales
Along with the recent figures detailing a lessened frequency of mortgage application filings, property data has shows a slip in pending home sales was exhibited during February - possibly due to the national housing market's flagging inventory levels.

According to the National Association of Realtors, its Pending Home Sales Index fell about 0.4 percent to register at 104.8 during the second month of 2013, seeing decreases in activity for the Northeast and  South regions. The Midwest and West recorded nominal increases. While a small decline was noted, the index was observed at more than 8 percent higher than its year-ago level, as February 2012 figures saw the index at 96.6.

Though sale finalizations were not calculated, the organization reported contract activity had been up year-over-year for the past 22 consecutive months. As consumers face the recently-introduced federal regulations, this figure may see a small drop in the coming months.



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