Could last week's surprise 12 percent jump in the number of people applying for mortgages to purchase a home be a hint that the Spring real estate market could be better than a lot of the pundits believe?

Well, it probably would be a mistake to make too much fuss over a single week's statistical report from the Mortgage Bankers Association of America.

After all, the National Association of Realtors' latest pending home sale index -- which looks out over the horizon to predict sales activity a month or two ahead -- registered a decline of one and a half percent.

But you can't simply ignore all those new mortgage applications. They're real. Something's going on -- and it could be that the word is finally getting out to consumers that home loan rates at an average 5.6 percent for a 30-year fixed-rate mortgage -- are close to 40-year lows.

Money for home purchases right now is cheap, no question. And we all know housing prices are lower this year than they were last -- sometimes by 10 and 15 percent or more, depending on local market conditions.

So a 12 percent jump in purchase applications could be a significant development … or just a fleeting statistical fluke. We'll keep you up to date on it.

Another potentially important factor looking forward: The federal economic stimulus package signed into law this week opens the door to more affordable home purchases in some of the hardest-hit, high cost markets in California, New England, Florida and the Mid- Atlantic states.

Rather than being stuck with expensive "jumbo" loans -- with rates of one to two percent above standard -- buyers will now be able to take out mortgages with lower rates, even if the loan amounts go to nearly $730,000.

Those new "budget-priced" jumbos will be available not only through Fannie Mae and Freddie Mac, whose lower capital costs get passed onto borrowers, but also through the FHA, whose capital costs are even lower.

There's a hitch, though: These special jumbo deals will only be available this calendar year. They disappear December 31st.

Buyers and sellers who want to benefit from this part of the stimulus package need to get into the game fairly soon.

Who knows? Maybe the economic stimulus package -- which most people think of in terms of tax rebate checks -- just might bring some heat and energy to the housing market, just in time for Spring.

Published: February 19, 2008

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Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consmer credit and banking industry regulation. He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.