3:16 PM by Amber Nelson

The number of applications for mortgage loans bounced up to it highest level since December, according to data from the Mortgage Bankers Association.

Based on its seasonally adjusted index of mortgage application movement, refinances and home purchase applications were collectively up 15.5 percent during the last week. The refinance index alone was up 17.2 percent, while the home purchase index also jumped by double digits – 12.5 percent.

“An improving job market is beginning to pave the way for an improving housing market," said Michael Fratantoni, MBA vice president of research and economics. "Additionally, mortgage interest rates remained below 5 percent for a second week, maintaining affordability for buyers and leading to an increase in refinance applications.”

The key words in his statement appear to be "beginning to." As much as we would all like to see it, a truly recovering housing market just doesn’t appear to be here yet. There have been several signs that indicate most of the home purchase applications have been going to investors and all-cash buyers, who are mostly snatching up foreclosed properties and short sales. With so many distressed properties on the market and plenty more to be added this year, home prices could fall as much as 5 to 10 percent before 2012. That means more underwater homeowners and the potential for even more foreclosures.

CoreLogic, based in Santa Ana, Ca. recently released a study that said as of December 31, almost one in four (23.1 percent) of all residential mortgages were underwater.

“Negative equity holds millions of borrowers captive in their homes, unable to move or sell their properties," said CoreLogic Chief Economist Mark Fleming as quoted in an MBA online article. "Until the high level of negative equity begins to recede, the housing and mortgage finance markets will remain very sluggish.”

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.Posted inMortgage Rates, Mortgage Refinancing, MortgagesPermalinkNo Comments » Leave a ReplyClick here to cancel reply.

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