While home loan interest rates are staying extremely low, the interest among prospective home buyers in obtaining mortgages was up this past week. It is the first increase since a month ago.
Lenders have been giving very well qualified borrowers an average interest rate of 4.75 percent for a thirty year fixed rate loan, which was a slight increase from the 4.72 percent of the previous week. An up-front lender fee, along with points, would have amounted to 0.7 percent of the financed amount.
In spite of the near record-setting low interest rates, home purchase mortgage applications had dropped dramatically following the expiration of the Federal home purchaser tax credits on April 30th. This brought about some speculation as to whether a recovery of the housing market would be maintainable now that government stimulus credits are gone. (California still has in effect its stimulus home buyer tax credit.)
It is fairly obvious that the number of home purchase mortgage applications were down during May due to the termination of the tax incentive for buyers. This incentive had caused the increase in mortgage applications during the preceding month as buyers rushed to open escrow before the deadline.
All said, it is not possible at this time to say that we are in the early stages of a housing market rebound.
