US mortgage applications rose for the first time in three weeks as near record low interest rates spurred demand for home refinancing and purchase loans, data from an industry group showed on Wednesday. The jump in demand came several weeks after the unveiling of the strongest government action yet to aid homeowners since the housing markets meltdown began and may help gauge what is in store this spring, the peak home-buying season.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended March 6 increased 11.3 percent to 723.4. Mark Goldman, lecturer of real estate at San Diego State University, said interest rates on mortgages are at enticing levels that could lift demand in the months ahead.
"It does not really matter if interest rates on mortgages move up one week or move down another, they are still at historically low levels," he said. Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 4.96 percent, down 0.18 percentage point from the previous week and the second lowest rate since the weekly MBA survey began in 1990. The record low was 4.89 percent for the week ended January 9, 2009.
Interest rates were well below year-ago levels of 6.37 percent. The MBAs seasonally adjusted purchase index rose 7.1 percent to 253.3. The index, however, was down 31.3 percent from its year-ago level of 368.8. Overall mortgage applications last week were 7.7 percent above their year-ago level. The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was up 4.3 percent.
The Mortgage Bankers seasonally adjusted index of refinancing applications surged 13.3 percent to 3,470.7. The index was up 41.8 percent from the year-ago level of 2,448.2. The refinance share of applications increased to 67.9 percent from 66.9 percent the previous week. The adjustable-rate mortgage share of activity was unchanged at 2.3 percent. Fixed 15-year mortgage rates averaged 4.54 percent, down from 4.73 percent the previous week. Rates on one-year adjustable-rate mortgages increased to 6.21 percent from 6.13 percent.
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