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Homebuyers dipping toes back into market

September 9, 2010 - More buyers are submitting mortgage applications for the purchase of a new home, which could indicate that nationwide relocation activity may soon be on the rise.

Mortgage applicants who were moving into new homes submitted the highest number of purchase applications since the end of May, according to the Mortgage Bankers Association's weekly applications survey. While total application volume decreased 1.9 percent from the previous week, purchasing activity was up 6.3 percent for the week ending September 3.

At the same time, refinance applications decreased 3.1 percent from the previous week. It was one of the rare occasions this summer when refinancing declined while purchasing improved. Refinance applications also made up a slightly smaller share of total mortgage activity, decreasing from 82.9 to 81.9 percent.

Even so, the MBA's vice president of research and economics, Michael Fratantoni, warned that moving activity remains much lower than it was at this time last year. "Purchase activity remains well below levels seen prior to the expiration of the homebuyer tax credit, and is almost 40 percent below the level recorded one year ago."

Nevertheless, low mortgage rates might finally be encouraging more people to consider moving into a new home. According to Freddie Mac, interest rates on a 30-year fixed-rate mortgage this week averaged just 4.35 percent.

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