Home loan applications in the US were boosted by the highest purchase index since the homebuyer tax credit expired in April.
Overall loan applications rose 2.1 percent last week, the biggest jump since early May. This reflects improvements in the position of potential home buyers, said the Mortgage Bankers Association (MBA).
Meanwhile, refinancing loans dropped 1 percent last week, bringing down the refinance index to its lowest point since June this year.
“The increase in purchase applications last week aligns with other incoming data suggesting that consumers are feeling somewhat more confident with their financial situation,” said Michael Fratantoni, vice president of Research and Economics at MBA.
“While the increase was magnified somewhat by the comparison to the holiday week, the level of purchase applications on a seasonally adjusted basis is now at its highest level since the expiration of the homebuyer tax credit.”
The four-week average for the seasonally adjusted purchase index rose 4 percent, while the market index plunged 3.2 percent and refinance index dropped 4.8 percent. The refinance share of home loan activity also declined to 78.6 percent of total applications, down from 80.3 percent the previous week.