Last week, Wells Fargo announced that it expected a Quarter 1 profit of $3 billion. This was big news, contributing to optimism that maybe — just maybe — financial companies were coming out of the woods and ready to stop losing so much money. Wells Fargo attributed a great deal of its success to the fact that it is actually approving mortgages and refinancing.

Indeed, a large percentage of Wells Fargo’s success is probably due to the amount of “new money” coming into the company due to new mortgages: About 25% of Wells Fargo mortgages in Quarter 1 were purchases rather than refinancing. This could indicate good news for the housing market, since it may indicate that there is a measure of recovery on the way.