Data shows decrease in default rates and increase in mortgage applications

A recent S&P Indices and Experian report showed a 2.02 percent and 1.4 percent decrease in first and second mortgage default rates from May to June.

Some major cities including Chicago, Dallas and Miami, however, experienced increases in default rates. Chicago default rates jumped from 2.37 percent in May to 2.59 percent in June, Dallas increased from 1.58 percent to 1.59 percent and Miami rose from 5.31 percent 5.41 percent.

As defaults decline, more homebuyers are pursuing loans. The Mortgage Bankers Association saw the largest increase since March in mortgage application activity this past week. The organization reported a 15.5 percent increase in applications as the refinancing index increased 23.1 percent in the same week. Refinancing accounted for 70.1 percent of all mortgage applications, up from 65.6 percent the week before.

"Ongoing turmoil in the financial markets primarily due to the sovereign debt crisis in Europe has brought mortgage rates back to their lowest levels of the year," said BA vice president of research and economics, Michael Fratantoni.  

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