The number of mortgage applications filed in the U.S. edged up 3% from November to December, according to Mortgage Bankers Association data cited by Capital Economics.
Researchers with Capital Economics say December application filings regained ground lost in November and reflect a 30% year-over-year increase in total mortgage application filings for the month.
“Admittedly, they remain low by past standards,” wrote Kelvin Davidson, a property economist with Capital Economics.
“But at least these data add to the growing sense that a nascent recovery in the number of active mortgage-dependent buyers may now be underway.”
Refinancing applications resurged in popularity during the month of December, increasing 3% month over month after experiencing a brief contraction in November and soaring 38% above year ago levels.
“Clearly, the Federal Home Affordable Refinance Program (HARP), which allows Fannie Mae and Freddie Mac borrowers to refinance onto lower mortgage rates – no matter how high their loan-to-value ratio – continues to have a material impact,” wrote Davidson.
Home purchase applications also shot up 3% month-over-month in December, making it the fourth consecutive monthly increase.
Overall, home purchase applications remain low when compared to past housing markets, but Davidson says home purchases are at a two-year high in December, which at least shows signs of a housing market that is starting to pick up more traditional, non-investor homebuyers.
The impact of mortgage-backed securities purchases by the Fed continued to keep rates low, with the 30-year, fixed-rate conventional loan falling 5-basis points from 3.55% in November to 3.50% in December, Davidson noted.