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Mortgage applications on the rise

March 11, 2011 - A new report showed mortgage demand from relocating families increased to its highest level of the year during the week ending March 4.

According to the Mortgage Bankers Association's weekly applications report, total mortgage volume increased 15.5 percent on a seasonally adjusted basis from the previous week. Refinance applications rose 17.2 percent, reaching their highest reading since January. Meanwhile, demand for purchase loans pushed that index up 14.3 percent, putting it at its highest level of the year.

"On an unadjusted basis, purchase application activity is the highest since last May," said Michael Fratantoni, MBA's vice president of research and economics. "An improving job market is beginning to pave the way for an improving housing market."

Additionally, affordable mortgage rates encouraged a number of consumers to pack their moving boxes, said the report. According to the MBA, the average interest on a 30-year fixed-rate mortgage was 4.93 percent last week while 15-year loans averaged 4.17 percent.

Homebuyers have been watching mortgage rates fluctuate for weeks, and analysts said it's better to get into the market now better than later. The MBA predicts mortgage rates to rise as high as 5.3 percent by the end of 2011.
 

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