According to the Mortgage Bankers Association’s Weekly Applications Survey, the Market Composite Index, which measures total mortgage loan application volume, surged 23.1 percent last week from the week before. Refinance activity was up 26.4 percent and reached its highest level since August of last year. The Purchase Index also saw improvements, rising 10.3 percent from the week before. Michael Fratantoni, MBA’s vice president of research and economics, said interest rates dropped due to continued anxiety regarding the economic situation in Europe. The drop in rates led to the spike in refinance activity and brought buyers back to the market following the holiday season, according to Fratantoni. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances fell to 4.06 percent from 4.11 percent the week before. It was the lowest 30-year rate in the history of the survey. More here.

The U.S. Census Bureau and the Department of Housing and Urban Development’s New Residential Sales report for November shows sales of new single-family homes rose 1.6 percent over October’s pace to a seasonally adjusted annual rate of 315,000. The improvement puts new-home sales 9.8 percent above last year’s estimate of 287,000. There were 158,000 new homes for sale at the end of the month, which represents a six-month supply at the current sales pace. The median price for a new house in November was $214,000; the average price was $242,900. More here.

Fannie Mae’s National Housing Survey polls Americans each month to assess their attitudes and expectations toward owning a home, renting, mortgage rates, the economy, household finances, and overall consumer confidence. In November, 68 percent of respondents said now was a good time to buy a home and, for the first time in six months, surveyed Americans said they expected prices to rise over the next year. Among respondents, 22 percent said they expected price increases over the next 12 months. The average expected increase was 0.2 percent. Doug Duncan, Fannie Mae’s vice president and chief economist, said though home price expectations have become slightly positive, consumers remain concerned about the economy and view their household finances as being relatively flat. When asked whether they’d buy or rent their next home, 63 percent of Americans said they’d prefer to buy. More here.

According to two newly released price indexes, home values rose again in May. The Federal Housing Finance Agency’s House Price Index found a 0.4 percent increase from April. And though the improvement was slight, it market two-consecutive months of gains following 10 straight months of decline. Also, the FNC Residential Price Index showed home prices continuing a notable upward trend, climbing 0.8 percent in May. In a press release, FNC said the single-family housing market continues to show signs of price stabilization in line with rising activities in new housing starts and building permits.

Home price indexes tend to be heavily influenced by foreclosure and distressed property sales. Which means the higher the percentage of distressed sales, the more prices will appear to fall. According to CoreLogic’s home price index, however, housing values increased in April by 0.7 percent and, when excluding distressed sales, values were down just 0.5 percent from a year earlier, when the homebuyer tax credit boosted sales. By comparison, prices declined 7.5 percent year-over-year when including distressed sales. Mark Fleming, chief economist for CoreLogic, said the month-over-month increase was the first since government support for home buying was removed and, though it doesn’t yet indicate a long-term trend, it is a positive sign and reason for cautious optimism. More here and here.