Mortgage purchase applications hit highest level in more than 11 years

Mortgage applications rose 8% from one week earlier for the week ending June 12, with applications to buy a home hitting the highest level in more than 11 years, according to data from the Mortgage Bankers Association.

What they're saying: "The housing market continues to experience the release of unrealized pent-up demand from earlier this spring, as well as a gradual improvement in consumer confidence," Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement.

• "Mortgage rates dropped to another record low in MBA’s survey, leading to a 10 percent surge in refinance applications. Refinancing continues to support households’ finances, as homeowners who refinance are able to gain savings on their monthly mortgage payments in a still-uncertain period of the economic recovery."

State of play: While refinancings are helping buoy the housing market, their share of total applications remains below highs seen in previous recessions, especially given all-time low mortgage rates.

• That suggests the demand is due to consumers buying and not just current homeowners hoping to lower their monthly payments.
• The refinance share of mortgage activity increased to 63.2% of total applications from 61.3% the previous week.

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Editor’s note: This post has been corrected to reflect that mortgage purchase applications hit their highest levels in 11 years (not all mortgage applications).