Mortgage Applications Up Slightly This Week

U.S. mortgage applications rose slightly last week, reflecting an increase in demand for home refinancing loans, the Mortgage Bankers Association (MBAA) said its seasonally adjusted index of application activity for the week ending October 20.

Buoyed by increased mortgage refinancing demand, the group’s overall volume of activity increased 0.5 percent to 588.6 from the previous week’s 585.8.

Borrowing costs on 30-year fixed-rate mortgages, the industry benchmark, excluding fees, averaged 6.36 percent, up 0.03 percent from the previous week, but well below a four-year high of 6.86 percent touched in June.

The mortgage rates recorded across the country this week were well above year-ago levels of 6.06 percent, when the housing boom was just about peaking.

The MBA’s seasonally adjusted purchase index fell 0.6 percent to 382.4. The index was substantially below its year-ago level of 466.4.

The purchase index is considered a timely gauge of U.S. home sales, which have been dropping this year after five successive years of record growth.

Economists are concerned that sales falling too far will result in a widespread housing slump.

The group’s seasonally adjusted index of mortgage refinancing applications increased 1.8 percent to 1,790.4.

Many experts expect this to keep rising throughout the rest of this year, as more people are taking it upon themselves to opt out of risky home loans with adjustable-rates and refinance over to fixed-rate mortgage loans, in which their monthly payments remain the same over the life of the loan.