Mortgage Applications Rise, While Mortgage Delinquencies Tumble

There has been some good news in the housing market, particularly the mortgage market. Based on economic indicators, more people filed mortgage application forms to buy a house or to refinance their loan. Meanwhile, fewer mortgage holders are finding themselves behind on their payments.

The Mortgage Bankers Association reported that the total number of mortgage applications filed last week increased by 7% over the previous week. On a seasonally adjusted basis, the purchasing index saw a 2% gain last week, compared to two weeks ago, to its highest level in three years.

The refinance index also climbed up the same week, by 8%, mostly triggered by falling interest rates. The share of applications filed to refinance an existing mortgage rose from 75% two weeks ago to 76% last week; refinancing applications for adjustable-rate mortgages stayed at 4% of total activity, according to MBA.

According to the credit reporting agency TransUnion, the percentage of mortgage holders at least two months behind on their payments fell by 21% in the first quarter of 2013 to 4.56%, compared to the Q1 2012 figure of 5.78%. This shows the largest decline on record since TransUnion started collecting the data back in 1992. In addition, last quarter’s delinquency rate was 12% than it was during Q4 2012 at 5.19% — a four-year low.

Despite the improvement, the figures are still higher than the average historical rate of 1%-2%, before the housing bust. During the fourth quarter of 2009, mortgage delinquencies peaked at almost 7%.

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