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Mortgage Applications Rise By 10 Percent

Posted by Jose Marc Castro on Apr 18, 2016 07:52 AM EDT
New Home Sales Up Despite Rising Mortgage Rates more big
A sold sign lies in front of a newly constructed home at Sun City Huntley housing development May 24, 2006 in Huntley, Illinois. The Commerce Department reported that sales of new single-family homes increased an unexpected 4.9 percent last month, the highest rate since December 2005. Sun City Huntley is a subdivision created by Del Webb for adults age 55 and older. (Photo by Scott Olson/Getty Images) (Photo : Getty Images/Scott Olson)

In data obtained from the Mortgage Bankers Association Weekly Mortgage Applications Survey, the volume of applications jumped by 10 percent for the week ending April 8, 2016. The said news was reported on RISMedia.com.

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The current measure of mortgage application volumes, called the Market Composite Index, had risen on a seasonally adjusted basis from the previous week's reports. This was the highest increase since February 2016 and many predict further increases down the road.

According to MBA Chief Economist Mike Fratantoni, "(The market) helped by persistently strong job market and low rates, applications for both conventional and government home purchase loans increased last week. The purchase index was its second highest level since May 2010. Applications to refinance also increased as the 30-year contract rate decreased to its lowest level since January 2015."

In addition, the refinance mortgage market activity had increased its share to 54.9 percent of total applications, a rise of 0.04 percent from the previous week.

In another report, the mortgage market index to 520.2, seasonally adjusted. This was the strongest showing for the index since February 21, 2016. As for mortgage applications, the index was pegged at 241.9, the highest level for the said index since October 2015. It is also the second highest level for the index since October 2015, according to a report from Reuters.

Another important indicator, the index for loan refinancing applications, had jumped to 2,122.0, its highest level in the past seven weeks.

One blemish on an otherwise great weekly performance of the market was the average interest rate on 30 year mortgage. This type of mortgage is the most widely held mortgage in the United States. The interest rate fell by 4 basis points to nearly 3.82 percent. This was the lowest level for the said 30 year mortgage loan since January of this year.

 

 

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