Mortgage applications nationwide increased during the week of April 27 to May 1, according to the Mortgage Bankers Association. Mortgage applications included applications for house purchase loans and for loan refinancing, one of the schemes offered under the Obama administration’s program to reduce the number of homes in foreclosure listings.
The MBA seasonally adjusted mortgage application index increased by 2 percent to 979.7 during the week.
MBA said the rise in loan applications occurred despite the increase in mortgage rates to their highest points since the middle of March. The increase may be taken as a guide to estimate how the U.S. spring selling season will fare.
Jason Braford, director of Las Vegas-based ZipRealty, said home buying activity still increased despite the slight rise in rates. He said the low loan rates and low prices in foreclosure listings have driven lots of investors and first-time buyers to make their home purchases.
In Las Vegas, according to Braford, prices in foreclosure listings are approximating the low price levels in the 1990s, making the market very attractive to buyers and increasing transactions by 70 percent compared to the first months of 2008.
During the week of April 27 to May 1, rates for fixed-rate 30-year mortgage loans had an average of 4.79 percent, an increase of 0.17 from the average of the previous week, which almost matched the record low 4.61 percent registered during the week of March 23 to March 27.
The average of 4.79 was the highest rate since the 4.89 average posted during the week March 9 to 13, but it is still well below mortgage rates in the first months of 2008, which averaged 5.91 percent.
Real estate agent Braford has observed that buyers who are trading up or relocating are unable to sell unless they reduce their prices to low levels approximating price declines in foreclosure listings.
But first-time buyers, according to Braford, are enjoying many opportunities open to them, such as low mortgage rates, low prices in foreclosure listings and the $8,000 tax credit.
Meanwhile, the MBA seasonally adjusted refinancing application index rose by 1.2 percent to 5,169.3 during the week of April 27 to May 1. The rise in the index represents efforts by homeowners to reduce their monthly payments to protect their houses from being added to foreclosure listings.
Rates for fixed-rate 15-year mortgage loans had an average of 4.57 percent, an increase from the 4.45-percent level the previous week. Interest rates for one-year adjustable rate mortgage loans increased from 6.23 percent to 6.36 percent.
