US Mortgage Applications Up 1st Time In 3 Wks: MBA

Source : The Business Times, August 27, 2008

NEW YORK - US mortgage applications rose for the first time in three weeks as interest rates edged lower, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended Aug 22 increased 0.5 per cent to 421.6.

Mortgage applications during the previous week had fallen to their slowest pace since December 2000.

While last week's increase was small, the report offers a glimmer of hope for the US housing market, currently suffering the worst downturn since the Great Depression.

Significantly tighter lending standards and an unwieldy supply of homes for sale are just some of the factors weighing on the US housing market.

Borrowing costs on 30-year, fixed-rate mortgages, excluding fees, averaged 6.44 per cent, down 0.03 percentage point from the previous week.

Interest rates were not far from year-ago levels of 6.41 per cent.

The MBA's seasonally adjusted purchase index rose 0.6 per cent to 315.9. The index came in well below its year-ago level of 424.0, a drop of 25.5 per cent.

Overall mortgage applications last week were 31.5 per cent below their year-ago level. The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was up 0.05 per cent to 424.9.

The group's seasonally adjusted index of refinancing applications increased 0.3 per cent to 1,038.0. The index was down 40 per cent from its year-ago level of 1,729.6.

The refinance share of applications increased to 35.2 per cent from 34.8 per cent the previous week. The adjustable-rate mortgage share of activity decreased to 7.9 per cent, down from 8.0 per cent the previous week.

Fixed 15-year mortgage rates averaged 5.94 per cent, down from 5.99 per cent the previous week. Rates on one-year ARMs increased to 7.15 per cent from 7.07 per cent. -- REUTERS