Washington, D.C. – According to the Mortgage Bankers Association the amount of loan applications dropped by about 2% last week (ending April 1st) on a seasonally adjusted bases. Still, more then 3/5 (61.2%) of all loan applications filed the week of the 1st were for people hoping to refinance their current mortgages, some of which are under water.
Even though refinancing applications dipped (still in the lead for all mortgage applications) loan applications for those hoping to purchase a home rose 6.7% last week to the a level not seen yet this year. As the as the first quarter of the year drew to a close March 31st, the news that people are buying homes is a very good sign.
The fact that people are buying still, even more then earlier this year, may also be linked to the Labor Department’s recent report that shows job growth and lowering unemployment rates. However, due to a still weakening U.S. Dollar, growing national debt and rising oil prices, the small amount of this economic recovery might not last long or might just even be a statistical bluff.
On top of everything mentioned above the average rate on a 30-year fixed mortgage went up by 0.01% to 4.93% last week from the preceding week. This is not much as on a 30-year fixed rate with 3.5% down on a $100,000 mortgage the 0.01% increase adds just over $200.00 on the life of the mortgage, excluding taxes and insurance. However, unless the rates go above 5% the biggest threat to people not buying will be the physiology of the rates rising above another whole percentage mark.
