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Purchase activity maintains steady pace

December 2, 2010 - Buyers continued to seek mortgages to finance their relocation to a new home during the week ending November 26.

The Mortgage Bankers Association reported that when adjusted for the Thanksgiving holiday, purchase applications increased 1.1 percent from the previous week while the four-week moving average climbed 3.8 percent. Purchase activity has increased for two consecutive weeks and is currently at its highest level since May, right after the expiration of the federal homebuyer tax credit, which provided many families with the incentive to pack their moving boxes.

Today, the main driver of home sales may be record-low mortgage rates, though the MBA reported that rates were higher this week. The average interest on a 30-year fixed-rate mortgage climbed from 4.5 percent to 4.56 percent, while 15-year loans were up to 3.91 percent.

Those hikes may have discouraged many from refinancing their mortgages - that measure dropped 21.6 percent from the previous week and refinance applications continue to make up a smaller share of total mortgage activity each week. Last week that share was down to 74.9 percent from 78.6 percent.

Purchase activity could climb again now that more relocating families will have access to distressed properties - often a popular homebuying choice among those looking for cheaper homes. Fannie Mae and Freddie Mac notified real estate agents last week to resume foreclosure sales, lifting a nationwide halt after several weeks.
 

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