Mortgage applications in the US climbed sharply in the week ending October 1, according to a report released by the Mortgage Bankers Association (MBA).
The company’s purchase index, which measures purchase loan application activity, rose 9.3 percent from a week ago and is at its highest peak since May this year.
Jay Brinkmann, chief economist at MBA, said the upswing in mortgage applications could be attributed to several tweaks in Federal Housing Administration regulations.
“One possible driver of [the] big increase in … applications was a desire by borrowers to get applications in before new FHA requirements took effect October 4th, which included somewhat higher credit score and down payment requirements,” said Mr. Brinkmann.
Low mortgage rates are also helping stimulate mortgage demand in the US, as mortgage rates have been hovering near historic lows in recent weeks.
The average rate for 30-year mortgages dropped to a record low of 4.25 percent, while 15-year loans also hit an all-time low of 3.73 percent.
However, the rise in mortgage applications may not man the return of a healthy housing market, as home prices and sales of both new and existing homes remain down.