Home buyers are returning to the mortgage market, undeterred by rising mortgage rates.
Mortgage applications to buy a home, viewed as a gauge of future home-buying activity, climbed 4 percent last week on a seasonally adjusted basis. Purchase applications are now nearly 5 percent higher than a year ago, the Mortgage Bankers Association reported Wednesday.
“More prospective home buyers returned to the market after two weeks of decreases in purchase activity, which were possibly due to spring break season and Easter,” says Joel Kan, the MBA’s associate vice president of industry surveys and forecasting.
Home buyers were unfazed by higher rates last week. The average 30-year fixed-rate mortgage was 4.23 percent, up from 4.20 percent the week prior, MBA reports.
The higher rates did cause homeowners to back off of refinancing, however. Refinancing applications were down 5 percent last week. That pushed down overall loan applications on the MBA’s activity index by 0.1 percent for the week (which totals purchase and refinancing demand). Total mortgage application volume now is 15 percent lower than the same week a year ago, due to the decrease in refinancing activity. Refinancing volume is 33 percent lower than the same week a year ago, the MBA reports.