Fannie Mae released the March 2013 National Housing Survey which shows that consumers remain confident in the housing market even while having doubts in other areas of the economy. Responding to the survey, 48% believe home prices will increase in the next 12 months and 46%, the highest level since May 2011, believe mortgage rates will increase. Fifty percent feel home prices will go up in the next 12 months while only 64% said they would purchase a home if they were going to move.

Home prices may be a big factor for many consumers who want to purchase a home. According to the latest report from CoreLogic, a leading residential property information, analytics and services provider, the Home Price Index rose 10.2% on a year over year basis for the month of February 2013 and is the biggest increase since March 2006. This was also the 12th consecutive month that home prices increased on a national level.

According to the most recent survey of wholesale and direct lenders performed by FreeRateUpdate.com, conforming 30 year fixed mortgage rates are as low as 3.250%, 15 year fixed mortgage interest rates are as low as 2.375% and 5/1 adjustable mortgage rates are as low as 2.375%, all remaining the same. For the week ending March 29th, the Mortgage Bankers Association's Weekly Mortgage Applications Survey showed that volume fell 4.0% on a seasonally adjusted basis from the previous week.

Even though The Refinance Index dropped 6%, refinancing is still popular and represented 74% of all applications. HARP refinance applications decreased to 28%, but continues to show that there are many homeowners still reaching out to the program for refinancing. HARP loans are for those loans that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009; the program will be available until the end of 2013. Underwater homeowners use HARP refinances because the program does not have loan to value caps while, at the same time, offers these homeowners a means of moving to a better mortgage. By using HARP, there is the possibility of moving into positive equity territory at a faster pace.

The applications report also showed that the seasonally adjusted Purchase Index increased 1% from the week earlier which was most likely due to an increase in FHA applications prior to the April 1st increase in FHA fees. As of April 1st, FHA loans also require a minimum credit score of 620 and debt to income ratio of 43% in order to receive automated loan approval. Current FHA 30 year fixed mortgage interest rates are as low as 3.125% and FHA 5/1 adjustable mortgage rates are as low as 2.250%. Increasing by .250%, FHA 15 year fixed rates are now as low as 2.750%.

While the upfront mortgage insurance premium did not increase, FHA closing costs (APR) remain high because of the UFMIP and other FHA fees. Very often, seller concessions are used to help pay for these expenses. These new April 1st guidelines are not in effect for the FHA streamline refinance program with no cash out.

The streamline refinance is an opportunity for existing FHA mortgage holders to refinance to a better mortgage and does not require an appraisal or any other documentation. For loans endorsed prior to June 1, 2009, the upfront and annual mortgage insurance fees have been drastically reduced for those refinancing through the FHA streamline program.

Decreasing by .125%, jumbo 30 year fixed interest rates are now as low as 3.375%. Increasing by .125%, jumbo 5/1 adjustable mortgage rates are now as low as 2.625%. Remaining the same, jumbo 15 year fixed mortgage rates are as low as 2.750%. Borrowers must have excellent credit in order to receive low jumbo rates. Jumbo mortgages, which are necessary for financing that is above the conforming and FHA loan limits, are strict and require full documentation. Increasing competition in the jumbo loan market has made it necessary for these borrowers to shop around for a good deal that meets their needs.

Mortgage backed securities (MBS) affect mortgage rates which move in the opposite direction. MBS prices saw a major increase on Friday when the Bureau of Labor Statistics released a very weak March jobs report that showed only 88,000 non-farm payrolls added to the economy. This report sent stocks down, but helped MBS prices and mortgage rates.

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