Demand for purchase mortgages jumped the week ending Nov. 19 to the highest level since the expiration of the homebuyer tax credit, the Mortgage Bankers Association said in releasing the results of its Weekly Mortgage Applications Survey.
Purchase loan applications were up 14.4 percent from the week before, the MBA said, to the highest level since the week ending May 7. The increase in demand was magnified somewhat by the fact that the previous week included Veterans Day and no adjustment was made for the holiday, the MBA said.
But the survey also showed applications to refinance dropped 1 percent from the holiday-shortened week before, to the lowest levels since June, as rates for 30-year fixed-rate loans continued to climb.
"The increase in purchase applications last week aligns with other incoming data suggesting that consumers are feeling somewhat more confident with their financial situation," said Michael Fratantoni, MBA’s Vice President of Research and Economics, in a statement.
Demand for purchase loans remained off 7.4 percent from a year ago, and applications to refinance still accounted for 78.6 percent of loan applications, although that was down from 80.3 percent the previous week.
The average contract interest rate for 30-year fixed-rate mortgages increased to 4.50 percent from 4.46 percent, with points decreasing to 0.88 from 1.12 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. That’s the highest rate in the survey since the week ending September 3.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.83 percent from 3.87 percent, with points increasing to 1.04 from 0.91 (including the origination fee) for 80 percent LTV loans. The increase in points meant that the effective rate was unchanged.