Buyers are Still Interested in Purchasing Homes Despite Mortgage Interest Rate Increase

Despite the fact that mortgage rates have started to climb, the Mortgage Bankers Association reports that home buyers are still rushing to purchase a home in an effort to take advantage of the home buyer’s tax credit that is slated to expire soon.
Although the number of refinance applications took a bit of a fall after mortgage interest rates hit their highest levels since Cheapest Month To Buy A House August, the Mortgage Bankers Association reports that requests for home purchase mortgage loans have remained steady.
While it is true that that purchase index rose by half a percent when compared to the end of March, the rates are still down by 18.1% when compared to a year ago. Therefore, while it is certainly good to hear that mortgage loan requests appear to be remaining steady, there is still plenty of ground to be made up. Furthermore, there is still a question as to whether or not these gains will continue after the home buyer’s tax credit program expires.
Thanks to the half a percent purchase index increase, the share of government purchase applications also rose to 49.9% of all applications. As a result, government purchase applications reached their highest share in more than 20 years. Furthermore, the national Market Composite Index, which is used to measure the volume of mortgage loan applications received, did fall by 11% during the week ending on April 2 when compared to the previous week. These figures were seasonally adjusted.
“Mortgage rates jumped last week as the Federal Reserve completed their purchases of mortgage-backed securities,” said Michael Fratantoni, who is the vice president of research and economics for the Market Composite Index association.
According to the association, number of refinancing applications from 63.2% of the total mortgage applications to 58.7%. This represents the lowest these figures have been since the week that ended on August 28, 2009. The average interest rate for 30-year, fixed-rate mortgages, on the other hand, went up Contracts Between Buyer And Seller from 5.04% to 5.31%, which represents the highest rate since the first week of August 2009. At the same time, the average interest rate for a 15-year, fixed rate mortgage increased from 4.34% to 4.54% while the average interest rate for a one-year, adjustable-rate mortgage increased from 6.88% to 7.03%.
According to the Austin Board of Realtors, the real estate news from the Austin area is even better. Not only did home sales in the area increase by 4% when comparing February of 2010 with February of 2009, but properties in the area are spending less time on the market as well.

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