The Mortgage Bankers Association reported that new mortgage applications rose last week to the highest level since the home buyer tax credit expiration. Record-breaking low interest rates seem to be the fuel that led to a 17.2% increase in FHA loan apps for home purchases, while conventional loans for purchases also increased by 3.6%. Last week marked the second consecutive week of increased purchase apps.
MBA also reported that the average contract interest rate for 30-year fixed-rate mortgages decreased to 4.25 percent last week, down from 4.38 percent. Rates for 15-year fixed-rate mortgages also fell, from 3.77 percent to 3.73 percent.
Financial experts speculate that mortgage rates could go even lower if Uncle Sam and Helicopter Ben unleash another round of quantitative easing, commonly referred to as QE2.
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