After hitting its worst level in two decades, mortgage applications managed to climb higher. In the latest update from the Mortgage Bankers Association, for the week ended February 28, applications for home loans jumped 9.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index surged 11 percent.
There have only been a handful of increases over the past nine months as the housing market returns to a more sustainable pace. As the chart above shows, mortgage applications are near their worst level in years, but the Refinance Index also increased 10 percent from the previous week, while the Purchase Index gained 9 percent. On an unadjusted basis, the Purchase Index was 19 percent below year-ago levels.
Overall, the refinance share of mortgage activity accounted for 57.7 percent of total applications, the lowest shares since September 2013 and down from 58 percent a week earlier. However, interest rates declined in the latest report, which might help stem the slide in refinance activity.
The average interest rate for a 30-year fixed-rate mortgage fell to 4.47 percent from 4.53 percent. Meanwhile, the average rate for a 15-year fixed-rate mortgage declined from 3.56 percent to 3.52 percent. However, housing affordability issues are likely to remain a theme this year.
The cost of homeownership is on the rise across the nation. The estimated monthly house payment for a median-priced, three bedroom home purchased in the fourth-quarter of 2013 surged 21 percent to $865, compared to $714 from a year earlier, according to the latest report from RealtyTrac. The firm analyzed 325 U.S. counties and included other factors such as insurance, taxes, maintenance, and tax deductions. Among the 15 most populated counties analyzed, the estimated monthly house payment jumped an average of 34 percent from a year ago.
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