Last week after interest rates dropped to a five week low, mortgage applications in turn rose reflecting the change in interest rates.
For the third consecutive week applications for mortgage loans to purchase homes rose, which is an early indicator of sales that will greatly help the hard-hit U.S. housing market that has been showing promising signs lately of stabilization.
The Mortgage Bankers Association has indicated that mortgage applications for both purchase and refinancing loans rose by 5.6 percent to 527.0 for the week of August 14th.
What's interesting is that it has been noted that the level of interest rates on mortgages has less to do with home buying than it does with refinancing.
With the government's $8,000 tax credit for first-time home buyers combined with high affordability and low mortgage rates; all have helped lay the foundation for stabilization in the housing market and now people can buy the home of their dreams and afford it too.
30-year fixed-rate mortgages, minus fees, have averaged 5.15 percent which is down 0.23 percentage point from the previous week which was the lowest since the week of July 10, while remaining above the all-time low of 4.61 percent set at the end of March of this year.
This time last year interest rates were at 6.47 percent.
Recently, the housing market has been showing positive signs of stabilization. Some of those signs have included rising home sales in addition to home price declines that are calming in many areas of the country. In fact, home prices in some areas around the nation have risen.