Mortgage Applications Rise 11.3% Following Private Sector Job Growth

By Kyle Chezum Updated on 2/2/2011

2/02/11

An unexpected increase in mortgage applications during the week ending January 28 took economists by surprise and strengthened opinions that the housing market, while not yet healthy, is at least alive and fitfully stirring.  The 11.3% increase comes on the heels of an equally sudden 12.9% decrease the previous week.

Applications rose even in spite of an increase in interest rates, which ticked upward from 4.8% the previous week to about 4.81% this week.  Refinancing activity continued to decrease.  Overall, the volatile past two weeks all but cancel each other out.

Michael Fratantoni, MBA vice president of research and economics, said, "Looking over the past two weeks, purchase applications are flat, and refinance applications are down about five percent."  No strong sign of recovery yet, but it's something.

One factor that may have contributed to the increase was an upward gain in private sector jobs.  About 187,000 new jobs were added in the private sector during the month of January, beating economists' predictions.  Most of the jobs came from the small business sector.  The increase is not as high as December's but shows continued upward progress in the economy as a whole.