As a result of a recent decline in mortgage rates, mortgage application activity surged during the week ending April 13.
According to a recent report from the Mortgage Bankers Association, mortgage application activity rose 6.9 percent during the week, even though a number of weak economic and housing market indicators continued to concern industry experts.
"Renewed concerns about sovereign debt in Europe led to a drop in rates last week, with the 30-year rate tying our survey low, reached in early February," said MBA senior vice president of research and education Jay Brinkmann. "Refinance activity picked up in response, increasing 13.5 percent for the week."
The refinance share of activity accounted for an estimated 75.2 percent of all demand. The previous week this share hovered at 70.5 percent. Meanwhile, the report noted that 32 percent of these requests were for government initiatives, such as the Home Affordable Refinance Program.
As distressed borrowers continue to utilize these government programs to restructure their home loans, it could result in fewer defaults and foreclosures, which could further help property values stabilize.