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Mortgage applications on the rise

The top chart shows an index of mortgage applications (all types), and the bottom chart shows the history of 30-yr fixed mortgage rates. Late last summer I noted what looked to be a new buying uptrend underway, and now it looks like the real thing. There has been a 29% increase in new applications for mortgages since last July, even though 30-yr fixed mortgage rates have been higher than they were last summer for the past 5 months. (Actually that's the wrong way to characterize what has happened: demand for mortgages is not up despite the rise in mortgage rates—mortgage rates are up because of the rise in the demand for mortgages, and the strengthening of the economy in general.) All in all, a healthy sign of improving housing fundamentals.

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