lowrate.com

For the first time in weeks, it appears homeowners might be dipping their toes in the homebuying market.

The Mortgage Bankers Association reported that more homeowners submitted applications to buy a home for the week ending July 16. Purchase applications increased 3.4 percent that week, after having fallen 10 of the last 11 weeks. The improved outlook likely comes as more people seek out the relative security of government loans.

"The strength in purchase applications comes from government loans, likely indicating that prospective buyers are drawn by the lower down payment requirements," said MBA’s vice president of research and economics Michael Fratantoni.

Interest rates on 30-year and 15-year fixed-rate mortgages reached the lowest levels ever recorded by the MBA survey, adding to increased buyer interest and a flurry of refinancing activity, according to the report.

Purchase applications still make a relatively small share of the mortgage market, but this most recent increase is a positive sign after weeks of steady declines. The MBA’s Purchase Index had reached its lowest level since December 1996 for the week ending July 9, according to last week’s MBA report.