Lenders reported a bump in new mortgage applications in mid-April, but the uptick may turn out to have been more of a blip than an upswing in the trend line.
The volume of new mortgage applications increased 5.3 percent in the week ended April 15 compared with the prior week, according to a survey conducted by the Mortgage Bankers Association, or MBA, in Washington, D.C.
But the more interesting info, as always, was in the details:
- The index that measures home purchasing activity was up 10 percent to the highest level in more than four months.
That jump was driven largely by a 17.6 percent increase in applications for so-called government loans.
MBA Vice President of Research and Economics Michael Fratantoni explained in a statement that borrowers likely were motivated to submit applications for these loans prior to a scheduled hike in mortgage insurance premiums on loans insured by the Federal Housing Administration.
- The index that measures refinancing activity was up 2.7 percent from week to week, likely due to a dip in interest rates during the recent period. But refinancing activity dropped to 58.5 percent of total applications, the lowest proportion since May 7, 2010.
The four-week moving averages told a similar story. On that basis, the overall index was down 2.9 percent, the purchase index was up 2.5 percent and the refinance index was down 5.7 percent.
Also noteworthy was another uptick in the proportion of borrowers applying for adjustable-rate mortgages, which rose to 6.5 percent of total applications.
Despite low interest rates and lower home prices, the pace of home sales remains depressed. According to the National Association of Realtors, the annualized pace of sales in March was just 5.1 million homes, an increase compared with February, but still slower than the 5.44 million pace of sales recorded in March 2010. Sales in that month were elevated due to a federal tax credit for home purchases.
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