Mortgage Purchase Applications Slip, Refinancing Increases

Purchase applications for home mortgages declined by 2.0 percent in the April 1 week, but refinancing, boosted by lower rates, increased by 7 percent. The average rate for 30-year conforming loans ($417,000 or less) dropped by 8 basis points from the prior week to 3.86 percent. Year-to-year, the purchase index was up 11 percent, still strong but a far cry from early March levels when the it was more than 30 percent higher than year ago levels. The weekly report fails to support certain isolated evidence of revival in the housing market, such as last week's construction spending report for February, showing spending for new single-family homes rising 1.2 percent month-to-month and multi-family homes 0.9 percent. Nevertheless, the 11 percent year-to-year rise in the purchase index is in line with February's year-to-year 10.7 percent increase in residential construction spending, and these are still quite impressive.