Mortgage Applications to Buy Homes Fall to 13-Year Low

The change in mortgage applications this week was mixed in two surveys. A 14.5% jump in the volume of applications submitted for refinance partially offset the 27.1% plummet in applications submitted for purchase mortgages, according to the Mortgage Bankers Association (MBA). It marks the lowest level of purchase applications in 13 years — since May 1997 — bringing gross applications down 1.5% this week, MBA said. “Purchase applications … declined almost 20% over the past month, despite relatively low interest rates,” said MBA vice president of research and economics Michael Fratantoni. “The data continue to suggest that the [first-time homebuyer] tax credit pulled sales into April at the expense of the remainder of the spring buying season.” Fratantoni added: “However, refinance borrowers did react to [recent] lower rates, with refi applications … hitting their highest level in nine weeks.” The refinance share of mortgage applications rose to 68.1%, from 57.7% last week, MBA said. Additionally, the adjustable-rate mortgage share of activity remained constant at 6.3% of total applications. The Mortgage Maxx index, which adjusts data to reflect the number of households applying for a mortgage, rose 4.9% in the same week. This lift in household activity over last week could be “only a seasonal bias,” according to the Mortgage Maxx. Write to Diana Golobay.

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