Mortgage Applications Rise; First Increase in Five Weeks

Home mortgage applications rose last week after five consecutive weekly declines, as lower home loan rates spurred both home purchase loan and home mortgage loan refinancing activity in the U.S.

The Mortgage Bankers Association said that its mortgage application index rose by a seasonally adjusted 3.6 percent in the week ended April 20 to 653.3, its highest level since the week ending March 23.

Thirty-year fixed-rate home loans - the industry’s benchmark home loan - averaged 6.13 percent, excluding fees, down 0.09 percent from the week before and 0.39 percent below this week a year ago.

The purchase index, considered a timely gauge of home mortgage activity and of home sales in America, increased 3.7 percent to 411.0. Its mortgage refinancing gauge, meanwhile, rose 3.6 percent.

The share of overall home loan activity designated for mortgage refinance purposes also gained ground over the past seven days, having tapered off considerably in recent weeks.

Experts believe a rise in mortgage applications could help work through some of the hefty inventory of homes that sit unsold on the market - and that most economists say is impeding a housing market turnaround.

Nationally, sales of existing homes in March staged their biggest monthly drop in over 18 years, sliding by 8.4 percent, the National Association of Realtors said Tuesday.

It was also the eighth straight month that the national median home price fell, while homes lingering on the market swelled to a 7.3-month supply, nearing this cycle’s peak of 7.4 months (seen last October).

In a separate sign that the housing picture remains dim, prices of existing homes fell in February at a pace last seen almost 15 years ago, and consumer confidence also declined.

SOURCE: Reuters