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Economists are becomingly increasingly positive that the US lending market is about to turn a corner on the path to recovery.
Data from the Mortgage Bankers Association (MBA) showed the number of mortgage loan applications increased by 25.0 per cent compared with the same week a year earlier.
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“Purchase activity has not been deterred by interest rate volatility, and has continued to trend gradually upward,” the MBA said in a statement.
Single family housing starts rose 1.7 per cent in July, the US census Bureau reported yesterday, a helpful sign that overflowing home inventories are dropping and demand for new homes is picking up.
Economists are confident that residential investment will contribute to economic growth this quarter for the first time in more than three years.
Over the past year, the US government has tried to stimulate first home buyers, mitigate foreclosures and encourage banks to modify loans, while some state governments have placed moratoria on foreclosures.
The US Federal Reserve has cut interest rates to nearly zero and purchased government bonds and mortgage securities in an effort to bring down interest rates as low as possible, however until now, it only had limited success.
