Survey: More Americans seeking mortgages

03.14.09
By Nicholas Storie

It seems that homeowners are taking advantage of new low interest rates. Mortgage loan applications surged last week, says the Mortgage Bankers Association.

According to its Weekly Mortgage Applications Survey, applications for both new mortgage loans and refinancing applications were up last week.

The MBA reports that its Market Composite Index - which measures mortgage loan application volume - increased by over 11 percent from one week earlier and by almost 6 percent from the same time last year.

The Refinance Index also increased - by over 13 percent - and the MBA says that almost 68 percent of the reported mortgage activity was from refinancing.

About half of all U.S. retail residential mortgage applications are accounted for in this survey which has been conducted weekly since 1990. The most recent data shows that the average interest rate for 30-year fixed rate mortgages decreased to 4.96 percent from 5.14 percent.

But what do all these numbers mean for consumers?

A Reuters article says that this data will help industry players gauge demand levels for the springtime, often considered the peak home-buying season.

The news source quotes real estate lecturer Mark Goldman from San Diego State University as saying, "What is important right now is that home affordability has improved and low interest rates help more people afford to buy a home."

"It does not really matter if interest rates on mortgages move up one week or move down another, they are still at historically low levels," Goldman added.

The MBA figures come just weeks after President Obama unveiled his Homeowner Affordability and Stability Plan intended to help up to nine million homeowners avoid foreclosure and keep mortgage loans affordable.

Obama's plan intends to not only help homeowners, but also keep neighborhoods prosperous and protected from "negative spillover effects of foreclosure" including lower housing prices and increased crime.

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Mortgage applications are up