With national mortgage records having repeatedly shown lower rate levels in the past month, the number of loan applications has exhibited a related rise in recent weeks.
The Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending April 26 detailed an increase in loan application volumes, showing a sizable week-over-week increase of 1.8 percent on a seasonally adjusted basis. Additionally, the Market Composite Index improved 2 percent on an unadjusted basis from the preceding week. The Purchase Index fell 1.4 percent on a seasonally adjusted basis from figures recorded the week prior. The unadjusted Purchase Index only declined 0.5 percent, and was registered at a level 13 percent above that seen during the same week in 2012.
The organization's Refinance Index jumped 3 percent from the pervious week's reading, and marked the highest level seen since mid-January. However, the refinance share of activity again remained unchanged from the amount noted the week before, staying at 75 percent of total applications. Meanwhile, the Home Affordable Refinance Program share of refinance applications moved up from 32 to 34 percent last week, representing the highest level logged since MBA began tracking HARP application numbers back in February 2012.
Contract interest rate averages show widespread decreases
A possible reason for the recent uptick in application volume may be the continuously falling costs of obtaining a home loan.
Average contract interest rates for a 30-year fixed-rate mortgage (FRM) with conforming loan balances of $417,500 or less reportedly dropped to 3.60 percent, the lowest rate recorded since December 2012, from its former position at 3.65 percent. Average 15-year FRM contract interest rates also registered at the lowest level since December 2012, moving down to 2.84 percent from the preceding week's reading of 2.89 percent. In addition, contract interest averages for five- and one-year adjustable-rate mortgages decreased to 2.55 percent after being seen at 2.62 percent the week prior.
Pending home sales improve during march
As more consumers are able to afford property purchases, and lending companies are experiencing a feeling of safety and soundness in their loan agreements, an increasing number of home sales may be in the works.
The National Association of Realtors reported the amount of houses put under contract during March exhibited monthly and yearly growth, moving the Pending Home Sales Index up to 105.7. The figure is a month-over-month increase of 1.5 percent and a year-over-year hike of 7 percent.
According to the organization, pending sales have been recorded above year-ago totals for the last 23 months.