Mortgage Applications Lift Me Up (Finally)
At FREEandCLEAR, we follow the Mortgage Bankers’ Association (MBA) mortgage applications index which measures both purchase and refinance applications for mortgage lenders across the country. An increase in the MBA applications index reflects an increase in mortgage applications while a decrease in the index reflects a decline in mortgage applications.
After about two straight months of disappointing results, the mortgage applications index finally showed some signs of life. For the week ending March 20th, the composite mortgage application index, which includes both home purchase mortgages and refinancings, increased 9.5% as compared to a 3.9% decrease for the prior week. Home purchase mortgage applications increased 5.0% as compared to a 2.0% decline the prior week and refinance applications jumped 12.0% as compared to a 5.0% decline the prior week. Mortgage applications were boosted by lower interest rates as the average interest rate for conforming loans (mortgage amount less than $417,000) decreased to 3.90% as compared to 3.99% for the prior week. The latest mortgage application index report is welcome news for the mortgage and real estate markets after weeks of lackluster application activity. (Source: Bloomberg)
What it Means for Mortgage Borrowers
The rebound in mortgage activity is a sign that mortgage borrowers are finally responding to low interest rates by buying homes or refinancing their mortgages. While the increase in applications means that lenders are likely to be more focused on processing mortgages, the lack of activity over much of the year means that lenders should continue to aggressively pursue new mortgage business, which is a positive for mortgage borrowers. Whether you are thinking about buying a home or refinancing an existing mortgage, now may the right time to take advantage of low interest rates. Use the INTEREST RATES function on FREEandCLEAR to compare interest rates and fees for lenders in your area and then use our Mortgage Qualification Calculator to determine what size mortgage you can afford or our Mortgage Refinance Calculator to determine how much money you can save by refinancing.
The FREEandCLEAR Mortgage Expert
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