Uptick in loan requests is 'potentially a good sign for the spring home buying season, which has seen a slow start thus far'.

Demand for purchase loans picked up last week as mortgage rates took a breather from their meteoric rise, raising hopes that spring home sales won’t be floored by the one-two punch of soaring home prices and financing costs.

Purchase loan applications during the week ending April 29 were up 4 percent from the week before, with demand for conventional, FHA and VA loans all on the rise, the Mortgage Bankers Association said in releasing data from its latest Weekly Mortgage Applications Survey.

Looking back a year, however, purchase loan applications were still down 11 percent, and demand for refinancing has fallen by 71 percent as mortgage rates have increased by more than two percentage points during that time.

The purchase market remains challenged by low levels of housing inventory and rapid home-price gains, as well as the affordability hit from higher mortgage rates that are forcing prospective buyers to factor in higher monthly payments.

Rising rates have prompted a growing proportion of borrowers to turn to adjustable-rate mortgage (ARM) loans, or to pay lenders thousands of dollars in up-front “points” to get a lower rate.

The MBA reported average rates for the following types of loans last week:

For 30-year fixed-rate conforming mortgages (loan balances of $647,200 or less), rates averaged 5.36 percent — essentially unchanged from 5.37 percent the week before. With points decreasing to 0.63 from 0.67 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans, the effective rate decreased.

Rates for 30-year fixed-rate jumbo mortgages (loan balances greater than $647,200) averaged 4.92 percent, up from 4.89 percent the week before. Although points decreased to 0.43 from 0.47 (including the origination fee) for 80 percent LTV loans, the effective rate also increased.

For 30-year fixed-rate FHA mortgages, rates averaged 5.27 percent, down slightly from 5.29 percent. With points decreasing to 0.85 from 0.88 (including the origination fee) for 80 percent LTV loans, the effective rate decreased.

Rates for 15-year fixed-rate mortgages, popular with homeowners refinancing existing loans, remained unchanged at 4.68 percent. But with points decreasing to 0.76 from 0.80 (including the origination fee) for 80 percent LTV loans, the effective rate decreased.

For 5/1 ARMs, rates averaged 4.25 percent, down slightly from 4.28 percent the week before. Although points increased to 0.78 from 0.74 (including the origination fee) for 80 percent LTV loans, the effective rate also decreased from last week.