After weeks of soft loan application volume, the Mortgage Bankers Association reported a 15.5% increase in its Market Composite Index. Refinances lead the way, up 17.2% for the week; and purchases were up 12.5% from the prior week. The long winter for housing might be finally over. I expect we’ll see an uptrend over the next few months as the market improves.
Here’s a 3 year chart from the National Association of Realtors regarding purchase applications;
As you can we’re not far off the bottom. The turnaround will no doubt be slow and gradual for loan application volume especially in the face of rising interest rates. Other potential threats include; rising gas prices, a declining stock market, and stale home prices. Overpowering these factors could be an improving economy adding jobs each month. Also consumers are aware that approval standards are starting to ease at lending institutions which could help bolster loan app volume.
