Mortgage Applications Rise Despite Higher Rates

U.S. home mortgage applications rose for the first time in three weeks even as home loan rates surged to their highest levels since the middle of 2006.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both mortgage refinance and purchase loans, increased 6.6 percent during the week ending June 8.

The four-week moving average of mortgage applications, which levels out the more volatile weekly figures, was still down 0.3 percent.

Borrowing costs on 30-year fixed-rate home loans, excluding points, came in at an average of 6.61 percent, up 0.26 percent from the previous week, its highest level since the week ended July 28, when they hit 6.62 percent.

The benchmark mortgage rates are now exactly where they were one year-ago.

The seasonally adjusted purchase index, widely considered a timely gauge of home sales, rose 7.2 percent to its highest level since early January at 464.7.

The index was above its year-ago level of 414.6.

The seasonally adjusted index of applications designated for home mortgage refinancing increased 5.6 percent to 1,854.8. The refinancing share of total applications was 38 percent, unchanged from the prior week.

Fixed 15-year mortgage loan rates averaged 6.28 percent, up from 6.13 percent.

Rates on one-year adjustable-rate mortgages (ARMs) fell to 5.48 percent, the lowest in a year, from 5.74 percent. The ARM share of home purchase loans increased to 18.7 percent from 17.8 percent the previous week.

U.S. housing market indexes, in general, tend to be volatile and have recently painted a mixed picture, with some pointing to weakening and others to stabilization in the much-maligned sector.

The MBA’s survey covers about 50 percent of all U.S. retail residential home loans. Respondents include mortgage lenders, banks and thrifts.

SOURCE: Reuters