It is the spring home buying season throughout the country, yet mortgage applications fell even though record low mortgage rates remain in place. According to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending April 20th, the Market Composite Index dropped 3.8 percent on an adjusted basis and 3.3 percent on an unadjusted basis.

This is a definite change from the prior week ending April 13th when mortgage applications soared with the Refinance Index surging 13.5 percent. The current Refinance Index decreased 5.6 percent and of that number, the Conventional Refinance Index decreased 6.1 percent and Government Refinance Index dropped 2.1 percent. Mortgage refinance applications were 73.4 percent of all mortgage applications as compared with 75.2 percent the week before. The adjusted Purchase Index was up 2.7 percent from the previous week.

While there will be some weeks where mortgage applications may increase, the overall housing market remains under stress. Some borrowers may be refraining from a home purchase because of FHA's increase in upfront and annual mortgage insurance premiums. Low volume purchase applications continue to be an issue since the market has already entered the spring home buying season when there should normally be a surge of potential buyers hitting the market. While home affordability is at its highest level, lending standards remain tight blocking many consumers from successfully making a home purchase. Rents are now increasing as more people are choosing to rent or have no other options. At a time of opportunity for lower cost housing possibilities, borrowers need to look at all options available, such as the local housing initiatives that are out there to assist with down payments.

Right now, many FHA Streamline Refinances with no cash out are on hold until mid June when the upfront and annual mortgage insurance premium fees are officially decreased specifically for this program. The initial surge of Harp 2.0 applicants were the main cause of the hike in refinance applications for the week ending April 13th. With any new program there are usually issues and as this program gets tweaked, which is already in the works with Freddie Mac, previous applicants will be back to try again while new applicants will come forward. Between these two refinance programs, borrowers should remain persistent in getting their existing mortgage refinanced to the current low mortgage rates. Receiving a decline from one lender should not stop them from pursuing another lender since these programs will not be around forever.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders' rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard 0.7 to 1% point origination fee.

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