Applications Jump on Strong Purchase Activity: MBA
Mortgage application activity jumped 10.9 percent last week as anecdotal evidence suggested that purchase interest in bank-owned real estate is beginning to drive buying activity in some of the nation's hardest-hit housing markets. The Mortgage Bankers Association said Wednesday morning that a composite index of application activity rose to 557.1 for the week ended June 6, up from 502.3 one week earlier; applications remained 16.5 percent below year-ago levels. The MBA application index is calibrated to March 16, 1990; a reading of 502.3 means that application activity was roughly five times greater than when the index was first established. The jump in application activity comes on the heels of a six-year low in applications recorded the previous week. Refinancing activity increased 8.4 percent, the MBA said, while purchases surged 12.8 percent despite apparent further increases in benchmark 30-year fixed mortgage rates. The MBA said that rates on the 30-year FRM rose 7 basis points last week, hitting 6.24 percent. FHA purchase applications took off last week after stagnating for much of May, jumping 17 percent in one week; borrower interest in FHA-insured mortgages has soared amid the ongoing credit crunch. Reflecting strong purchase activity, the MBA said that refinance share of mortgage activity decreased to 39.8 percent of total applications from 40.6 percent in the previous week, as well. For more information, visit http://www.mortgagebankers.org.