Home Purchase Requests Jump to 9-Year Record High
Apr 17th, 2019 @ 9:30 PM by Amber Nelson
Even as interest rates continued to climb, the number of applications for home purchases rose to the highest level since April 2010, according to the Mortgage Bankers Association.
Total mortgage application volume decreased 3.5% during the week ended April 17, 2019, but was up 14% from the previous year. Home purchase requests rose 1% in the past week – reaching a 9 year high – and increased 7% compared with the year before.
Total applications were dragged down, though, by an 8% decrease in refinance application volume. The refinance share of all mortgage requests fell to 41.5%, down from 44.1% the week before. Still, refinance requests were up 26% over the previous year.
“Mortgage applications decreased over the week, driven by a decline in refinances. With mortgage rates up for the second week in a row, it’s no surprise that refinancings slid 8% and average loan sizes dropped back closer to normal levels,” said Joel Kan, the MBA’s associate vice president of economic and industry forecasting.
“Purchase activity remained strong and increased slightly, reaching its highest level since April 2010. The spring buying season continues to be robust, with activity more than 7% higher than a year ago and up year-over-year for the ninth straight week.”
Mortgage interest rates rose this week to a one-month high, according to mortgage guarantor Freddie Mac, with the average rate on a 30-year fixed-rate mortgage increasing to 4.44% with an average 0.42 point, up from 4.40% with an average 0.47 point. Investor fears about foreign economies has pushed rates higher. However, mortgage rates continue to be near historic lows.
With rising rates, adjustable-rate mortgages lost some popularity. The ARM share of total mortgage applications fell to 6.6%.
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.