Mortgage purchasing applications rally on looming tax credit deadline

March 31, 2010 08:52AM

Mortgage purchase applications jumped to their highest level since October 2009 this week, mimicking the trend seen just before the last expected homebuyer tax credit deadline, according to the latest survey from the Mortgage Bankers Association. Purchase applications were up 6.8 percent week-over-week, and the government share of such applications was 47.2 percent — also its highest since October 2009. “Last October… many homebuyers were rushing to get loans closed before the expected expiration of the homebuyer tax credit. We may be seeing a similar pattern now, as the extended version of the tax credit ends next month,” explained Michael Fratantoni, vice president of research and economics for the MBA. Meanwhile, refinancing applications decreased 1.3 percent in the week that ended March 26, dropping to 63.2 percent of total mortgage application volume from 65 percent one week earlier. This represents the lowest refinance share of mortgage activity since October 2009. Overall, mortgage loan application volume increased 1.3 percent from one week earlier. Interest rates for 30-year fixed-rate mortgages rose to 5.04 percent from 5.01 percent one week ago, while the 15-year fixed-rate mortgage increased slightly to 4.34 percent from 4.33 percent in the week-ago period. TRD