The Mortgage Bankers Association’s Purchase Index keeps tabs on the rate that people are applying for mortgages, and that number can give economists some insight into what’s going on within the market.
The first half of 2014 saw the numbers falling, corresponding with a slower-than-expected recovery in home sales during first quarter.
But then over the course of one week in early summer, the index rose by 10 percent. Such a jump is leading real estate professionals and mortgage lenders to speculate about the future. Some believe it is just a blip, a repeat of a similar temporary increase that occurred in 2013. But others are more hopeful.
National Association of Mortgage Brokers vice president Rocke Andrews said he saw the jump as a good sign. “This is a response to an increase in consumer confidence and feeling good about the economy, along with a short-term dip in interest rates,” he said. “The economy is getting better and people are feeling better about their jobs. If interest rates stay stable, we will see a pretty good rebound.”
Lender loanDepot conducted a survey and reported that half of the potential home buyers surveyed indicated that they had not pursued financing for a home purchase because they were afraid they wouldn’t qualify.
President and COO of loanDepot Dave Norris said too many people are sitting on the fence. “Potential buyers are forfeiting their dreams of homeownership before they find out what financing options are available to them. It’s never been easier than it is today to go online and research your options.”