MBA: Purchase Applications Reach Highest Level Since 2010

Applications for purchase loans reached their highest level since 2010 last week, the ""Mortgage Bankers Association"":http://www.mbaa.org/default.htm (MBA) reported Wednesday.

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The group's Weekly Mortgage Applications Survey for the week ending January 18 showed overall application volume was up a seasonally adjusted 7 percent from the prior week. On an unadjusted basis, application volume was up about 8 percent.

Demand for purchase loans continued to rise, with the weekly Purchase Index rising 3 percent from the previous week to its highest level since May 2010, when the first-time homebuyer tax credit expired. The unadjusted Purchase Index increased 9 percent compared with the previous week and was 26 percent higher than the same week in 2011.

According to the MBA, the increase in purchase applications was primarily for conventional loans, as the seasonally adjusted Conventional Purchase Index hit its highest level since October 2009 last week.

Refinances also continue to see interest, with the weekly Refinance Index increasing 8 percent from the previous week. The refinance share of mortgage activity was unchanged at 82 percent of total applications.

The rise in applications comes despite a slight rise in interest rates. According to the MBA, the average interest rate for a 30-year fixed-rate mortgage was 3.62 percent, up from 3.61 percent in the prior week. That rate has risen for five of the last six weeks, keeping in line with the ""MBA's forecast"":https://themreport.com/articles/mba-slow-growth-still-expected-despite-positive-signs-2013-01-21 for a bounce in rates in 2013.