Mortgage applications increase as market recovery continues

January 29th, 2013

Mortgage application volume is increasing as consumers take advantage of market conditions.

Many Americans have decided to become homeowners in 2013 while mortgage rates and home values remain favorable, as evidenced by the Mortgage Bankers Association most recent mortgage application survey.

According to the results, mortgage applications increased 7 percent from one week earlier for the week ending January 18. The volume of existing homeowners who visited their mortgage service company to refinance their current home loan also increased by 8 percent during the same time period, and refinance applications made up the largest share of the index. The purchase index also experienced an uptick of 3 percent, reaching its highest level since May of 2010.

The Federal Reserve said it plans to keep interest rates low through 2014, and possibly 2016 depending on market conditions. Several studies conducted by RealtyTrac, Zillow and independent industry experts noted that while 2012 marked the year of affordability for Americans with median-incomes, this year is also expected to provide favorable market conditions for potential buyers.

In addition, a number of reports have indicated that lenders are beginning to loosen the reins on credit access as Americans manage their finances more responsibly. This may make it easier for buyers to qualify for low-rate mortgages.