Mortgage Applications at the Highest Level Since July 2005

Despite a jump in borrowing costs US mortgage applications rose last week to the highest level since July 2005.

The Mortgage Bankers Association’s index of mortgage applications rose 2.5 percent to 811.8 in the week ending with December 7th. Although the Mortgage Bankers Association warns that the index is skewed by borrowers filing multiple mortgage applications having been previously denied. With tightening credit standards obtaining a mortgage has been harder than they have been in a long time. This is due to lenders being much more stringent after being stung by mortgage loans that were issued while lending practices were looser.

With borrower’s mortgage interest rates starting to adjust borrowers are scrambling to refinance their mortgage into a fixed rate loan prior to rates increasing. Borrowing costs on a 30 year fixed rate mortgage averaging 6.07 percent excluding fees, up .25 since last week. The Federal Reserve’s quarter percentage rate cut on the benchmark funds rate on Tuesday did little to directly stimulate the housing market.

To read more about US mortgage applications head on over to CNBC.