Mortgage application volumes grew 6.9% in the week ended April 13, as refinances rose and purchases fell, according to data from the Mortgage Bankers Association’s weekly survey.
The refinance index surged 13.5% and the purchase index plunged 10.4%.
“Renewed concerns about sovereign debt in Europe led to a drop in rates last week, with the 30-year rate tying our survey low, reached in early February. Refinance activity picked up in response, increasing 13.5% for the week. Participants in our survey indicated that about 32% of this refinance volume was for HARP loans,” said Jay Brinkmann, MBA’s chief economist and senior vice president of research and education.
“While purchase activity declined sharply for the week, this was mostly due to a 23% drop in applications for FHA purchase loans. This drop follows big increases in the demand for FHA loans over several weeks in anticipation of the FHA mortgage-insurance premium increases that went into effect last week. This was the largest weekly drop in the government purchase index since the expiration of the first-time homebuyer tax credit in May 2010. The demand for conventional purchase loans was down only slightly.”