The Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 26, 2010, increased 1.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1.5 percent compared with the previous week. “Purchase applications have increased over the past month, and are now at their highest level since last October when many home buyers were rushing to get loans closed before the expected expiration of the home buyer tax credit,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “We may be seeing a similar pattern now, as the extended version of the tax credit ends next month.”

The Refinance Index decreased 1.3 percent from the previous week and the seasonally adjusted Purchase Index increased 6.8 percent from one week earlier. This is the highest Purchase Index since the week ending October 30, 2009. The unadjusted Purchase Index also increased 6.8 percent compared with the previous week and was 9.3 percent lower than the same week one year ago. While both conventional and government purchase indexes saw increases this week, the government purchase index and the government share of purchase applications are at their highest levels since October 2009. The government share of purchase applications is currently 47.2 percent. The four week moving average for the seasonally adjusted Market Index is up 2.2 percent.

The four week moving average is up 5.4 percent for the seasonally adjusted Purchase Index, while this average is up 0.9 percent for the Refinance Index. The refinance share of mortgage activity decreased to 63.2 percent of total applications from 65.0 percent the previous week. This is the lowest refinance share recorded in the survey since the week ending October 23, 2009. The adjustable-rate mortgage (ARM) share of activity increased to 5.2 percent from 4.8 percent of total applications from the previous week.

The plain and simple? Looks like the market is turning to being driven by purchases. We know this because the refinance index failed to make much progress in the first quarter 2010, even as mortgage rates held below 5.00%.  It’s also entirely likely that the ‘fence sitters’ are getting nervous about rates rising coupled with the expiring home buyer tax credit are giving them the proverbial ‘kick-in-the-butt’ they so desperately need.

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