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MBA Index: US Mortgage Apps Up 15%

The Mortgage Bankers Association (MBA) reports that US mortgage applications have risen 15% after reaching their lowest levels in 12 years during the previous week.

This news is particularly encouraging as several factors are conflicting with a rapid recovery of US housing markets:

The Fed is ending its program of buying mortgage debt to keep mortgage rates low.

The federal homebuyer tax credit program deadline is nearing. Eligible buyers wishing to take advantage of this program must sign a home purchase contract no later than April 30, 2010 and close no later than June 30, 2010. Congress is experiencing much criticism for high levels of government spending, so it’s not likely that this program will enjoy a second extension.

Foreclosures aren’t going away. FHA expects a “bubble” of foreclosures during 2010 and 2011 resulting from many loans made quickly after the subprime crisis. Historical data suggests that mortgage loans are at highest risk for failing during their second and third year. Foreclosed homes bring down neighborhood home prices due to their inferior condition and banks’ willingness to offer them at bargain basement prices.

Although home prices may remain relatively low, mortgage rates can change at any time. If you’re ready to buy a home, or want to refinance an existing mortgage loan, it’s best not to delay too long. Mortgage rates can move quickly, and if you can qualify at current mortgage rates, this is a great time to refinance to a cheaper mortgage loan, or maximize your buying power using the combined benefit of low rates and home prices.

Get several mortgage quotes and compare mortgage rates for finding your best refinancing and mortgage loan options.