Housing Market Sees Early Spring Thaw
More people applied for loans to buys homes last week than any time since last Fall, according to the MBA's Market Composite Index, a measure of mortgage loan application volume. The seasonally-adjusted index for the week ended March 26 increased 1.3 percent from the previous week.
That's welcome news, following months of declining sales of new and existing homes. Industry-watchers attributed the jump to the upcoming expiration of a federal tax credit for new home purchases. The credit is set to expire at the end of April.
"Purchase applications have increased over the past month, and are now at their highest level since last October when many homebuyers were rushing to get loans closed before the expected expiration of the homebuyer tax credit," said Michael Fratantoni, MBA's Vice President of Research and Economics. "We may be seeing a similar pattern now, as the extended version of the tax credit ends next month."
The weekly survey of mortgage applications is one of the earliest measures of the health of the housing market. Not only do mortgage applications portent sales that could potentially close in the future, but the survey comes out faster. The latest survey provides some of the only information available so far on activity in the housing markets in late March.
In contrast, the Pending Homes Survey for February from the National Association of Realtors won't be out until April 5.