The number of mortgage applications surprisingly increased even with the relatively quiet week for interest rates.
According to the Mortgage Bankers Association (MBA), the total number of mortgage applications increased 4.9 percent week-to-week for the week ending November 14, which was mostly brought about by home buying applications. Though refinance applications only increased one percent week-to-week, home purchase applications jumped 12 percent, which has ben the highest since July. These results were adjusted for the Veterans Day holiday as well as the seasonal trends.
“MBA and other data are showing strength in the market for new homes, likely reflecting the boost from continued job growth in recent months,” MBA’s Chief Economist Michael Fratantoni said.
These purchase applications basically indicate the future of home sales since potential homebuyers need to secure a loan before purchasing a property.
Aside from this, homebuilder sentiments also increased this month with builders claiming a rise in buyer traffic according to a report released by the National Association of Home Builders.
However, even with such a huge increase, home purchase applications are still 6 percent lower the year-ago levels and are 9 percent below the level four weeks ago.
“This is historically a volatile time of year for purchase applications, and MBA’s seasonal adjustments made the difference,” Matthew Graham of Mortgage News Daily said.
The week’s increase is certainly good news for the housing market however, the trend has to continue for a long time to push the housing recovery.