Bloomberg Business Week reported today that mortgage applications rose by 1.3% on the week ending March 26, according to the Mortgage Bankers Association (MBA). This may result in a boost in the housing market as applicants scramble to beat the April 30 deadline to sign a contract on a home and qualify for the homebuyers’ tax credits being offered by the federal government.
The MBA states that this is the highest level of mortgage applications in one week since October 2009. This is good news for the housing market after news of disappointing new and existing home sales in February have been at the forefront this past week.
On the flip side, applications for refinancing fell by 1.3% from the previous week as interest rates on 15- and 30-year fixed-rate mortgages and one-year ARMs (Adjustable Rate Mortgage) increased after the Federal reserve let a program which kept interest rates low expire. The MBA reported that rates for 30-year fixed-rate mortgages went up from 5.01% to 5.04% last week. During that time, 15-year fixed rate mortgage rates inched up from 4.33% to 4.34% and the interest rate for one-year ARMs shot up from 6.75% to 6.88%.
The recent surge in mortgage applications may brighten the gloomy numbers in the current housing market in the coming months, but economic factors such as the unemployment rate will determine how bright the outlook will be.
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