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Purchase Mortgage Applications Roll On

Purchase Mortgage Applications Roll On

Michael Jensen, Mortgage and Finance Guru
, Mortgage and Finance Guru

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.

Home purchase mortgage applications jumped for the third consecutive week, increasing 7.0% for the week ending April 3rd as compared to a 6.0% increase the prior week.  The sustained improvement in purchase applications moved the purchase application index to its highest level since July 2013, reflecting meaningful momentum in the home purchase and mortgage markets.  Offsetting the positive news on the purchase front, refinance applications decreased 3.0% as compared to a 4.0% increase the prior week.  The composite mortgage application index, which includes both home purchase mortgages and refinancings, increased a modest 0.4%, following a 4.6% increase for the prior week.  The strong showing by the purchase applications index overshadowed the relatively flat performance by the composite applications index as the Spring buying season and low interest rates appear to be pulling home buyers into the market.  Mortgage rates continue to be attractive as the average interest rate for conforming loans (mortgage amount less than $417,000) dipped to 3.86% as compared to 3.89% for the prior week.  (Source: Bloomberg)

What it Means for Mortgage Borrowers

Three straight weeks of positive performance for the purchase application index suggests that momentum is finally building in the home purchase and mortgage markets.  The drop in refinancing activity is less of a concern as the refinance market saw a huge boost in activity to start 2015.  It will be interesting to see if the strength in the home purchase activity will continue through the Spring home buying season as the home purchase and mortgage markets have been relatively inconsistent over the past several years, unable to gain any sustained momentum.  Home buyers may finally be taking advantage of low interest rates and more reasonable lending standards including more favorable down payment and borrower credit requirements.  With many prospective home buyers, especially first-time home buyers, remaining on the fence, now is a good time to use the FREEandCLEAR Mortgage Qualification Calculator to determine what size mortgage you can afford.  Potential home buyers should also use our INTEREST RATES feature to compare lenders in their area to make sure they get a mortgage with the lowest rate and fees.

The FREEandCLEAR Mortgage Expert

www.freeandclear.com

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About the author

Michael Jensen, Mortgage and Finance Guru

Michael is the co-founder of FREEandCLEAR. Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade. His work has been featured in leading national and industry publications. More about Michael

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