Rise in Mortgage Applications with Higher Purchase Volume

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For the third consecutive week, there has been a rise in mortgage applications due to the increase in purchase volume. Peak levels were reached in July 2013, based on the Weekly Mortgage Applications Survey conducted by the Mortgage Bankers Association. With data based on the MBA’s market composite, there was a 0.4% increase in the mortgage loan application on a seasonally adjusted basis in comparison with the previous week during the April 3 end of week. During the previous week, the purchase index rose to 7%; the refinance index, meanwhile, decreased by 3% at about the same time.
According to MBA’s chief economist Mike Fratantoni in an April 8 press release regarding the survey results, the volume of purchase mortgage application during the prior week has risen to its peak since July 2013, brought about by low and affordable mortgage rates and stronger housing markets. The VA share of applications has risen from 10.5% to 10.7% and the FHA share went from 12.8% to 13.2% during the previous week. The USDA share is constant at 0.8% while the activities on refinance dropped to 57% and the adjustable-rate mortgage shares of mortgage fell to 5.5%. During the week of the study, interest rates have also shown to have decreased. For 30-year fixed mortgages with a balance that is more than $417,000, the contract interest rates have fallen from 3.9% to 3.81%. This is the lowest since May 2013.
For 30-year fixed conforming loans that have balances below $417,000, average interest rates also dropped to 3.86% and average contract interest rates for 30-year FHA-backed fixed-rate mortgages fell to 3.69%
5/1 adjustable-rate mortgages fell to an all time low since May 2013, ending at 2.76% as opposed to 2.93% the week before.
The survey done by the MBA includes more than 75% of all retail residential mortgage applications in the US. The respondents in the survey include commercial banks and thrifts and mortgage bankers.

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