The sharp rise in home purchase mortgage applications, to a two-year high in April, was an encouraging sign that the market may finally be turning a corner after years of stagnation. Admittedly, applications are still well below the level of home sales, and previous increases have proved to be a false dawn. But with credit conditions gradually loosening, the labour market continuing to strengthen and mortgage affordability set to remain very favourable for the foreseeable future, we expect that this will be the start of a more meaningful upturn.
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