Applications increased 1.6 percent from one week earlier and 18 percent year-over-year.
"The 18 percent [annual] gain in purchase application volume is yet another sign of growing strength in the housing market following this week's stronger numbers on new and existing home sales," said Michael Fratantoni, chief economist for the Mortgage Bankers Association.
The MBA’s survey, which included 75 percent of U.S. retail residential mortgage applications, also found that refinances – an important source of originator business – are also on the rise.
“The refinance share of mortgage activity increased to 49 percent of total applications from 48.5 percent the previous week,” the MBA said in an official release. “The adjustable-rate mortgage (ARM) share of activity increased to seven percent of total applications, the highest level since December 2014.”
These stats were released just days after speculation that applications could increase as a result of the collective credit recovery Americans are enjoying.
According to a recently released study by credit agency TransUnion, 1.5 million Americans who were forced out of the housing market by the housing crash will flood the housing market in the next two years.
The study found that 1.2 million “credit weakened” borrowers had sufficiently recovered by the end of 2014 to the point that they met Fannie Mae’s underwriting guidelines – all had at least a 620 FICO score, had no unpaid judgements or pending liens, and had passed the required loan waiting period.
Further, TransUnion predicts 700,000 more will join that group this year, 300,000 in 2016, and 500,000 in 2017.
And with this many Americans becoming credit-worthy, originators can expect weekly mortgage applications to continue to increase.
Mortgage applications are on the rise, according to the Mortgage Bankers Association, who reported Wednesday that applications had increased on a weekly and year-over-year basis.