Loan Demand Surges as Rates Fall

March 6, 2013

Mortgage applications for home purchases -- viewed as a leading indicator of future home sales -- rose a whopping 15 percent for the week ending March 1, according to the Mortgage Bankers Association’s weekly mortgage application activity index. 

Overall, the index -- which includes applications for home purchases and refinancings -- rose 14.8 percent, reaching its highest level since mid-January. 

Last week’s surge was a reversal of course after three consecutive weeks of declines in home mortgage applications.

Refinancing applications make up the biggest bulk of the index, and rose 14.8 percent last week. 

Applications rose as mortgage rates dropped last week. For example, the 30-year fixed-rate mortgage averaged 3.70 percent last week, down 7 basis points from the previous week, MBA reported. 

Source: “Mortgage Applications Surged Last Week as Rates Fell,” Reuters (March 6, 2013)

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