U.S. mortgage applications rose for the first time in three weeks even as interest rates surged to their highest level since mid-2006, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both refinancing and purchasing loans, increased 6.6% to 666.5 for the week ended June 8.
The four-week moving average of mortgage applications, which smoothes the volatile weekly figures, was down 0.3%.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.61%, up 0.26 percentage point from the previous week, its highest level since the week ended July 28, when it stood at 6.62%.
Interest rates were exactly where they stood a year-ago.
The MBA's seasonally adjusted purchase index, widely considered a timely gauge of U.S. home sales, rose 7.2% to its highest level since early January at 464.7. The index was above its year-ago level of 414.6.
The group's seasonally adjusted index of refinancing applications increased 5.6% to 1,854.8.
The refinance share of applications was 38%, unchanged from the previous week.
Fixed 15-year mortgage rates averaged 6.28%, up from 6.13%.
Adjustable Rates Fall
Rates on one-year adjustable-rate mortgages (ARMs) decreased to 5.48%, the lowest in more than a year, from 5.74%.
The ARM share of activity increased to 18.7% from 17.8% the previous week.
U.S. housing industry 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 hard-hit sector.
The MBA's survey covers about 50% of all U.S. retail residential loans. Respondents include mortgage banks, commercial banks and thrifts.