![]()
- Bankruptcies Jump, Hitting Highest Level in Four Years
- AIG, Ex-CEO Greenberg Reach Pact to Settle Disputes
- Bank of America CEO Search May Extend Into 2010
- Steepest Black Friday Discounts, Revealed
- 'Cancer of Fraud' Permeates Health Care System: Critics
- US Mint to Suspend American Eagle Gold 1-Ounce Coins
- Judge Erases Couple's $525,000 Mortgage Payment
- Where Do Pardoned Turkeys Go?
- For Many in US, It Will Be a Scaled-Down Holiday Season
- 4 Thanksgiving Week Buys For Your Portfolio: Market Pros
- There's a 'Great Chance' For a Double-Dip Recession: Strategist
- Revenge of the Gangsta Nerds
- Will TCU See The "Flutie Effect?"
- Retail Earnings and Sales to Improve in Q4: Analyst
- Consumers Catching the Holiday Spirit
- It's Beginning To Look A Lot More Riskless
- Crescenzi: Claims Level Suggests End to Job Losses
- Hedge Funds Take Early Lead in Warren Buffett's 'Big Bet'
MOST SHARED
- The Executive Job Search
- S&P Stocks Trading at New 52-Week Highs
- Where Do Pardoned Turkeys Go?
- US Mint to Suspend American Eagle Gold 1-Ounce Coins
- Judge Erases Couple's $525,000 Mortgage Payment
- Salvation Army's Kettles Now Credit Card-Ready
- Activision Prepares to Double Dip on ‘Modern Warfare 2’
- Trader Talk
- Topless Business Is Taking Off
U.S. mortgage applications rose last week, fueled by increased demand for home purchase loans even as interest rates hit their highest level in nearly a year, an industry group said Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended July 6 rose 1.1% to 626.2.
Applications were 10.5% above their year-ago level.
The four-week moving average of mortgage applications, which smooths out the volatile weekly figures, was down 1.6% at 627.0.
Mike Larson, a real estate analyst at investment firm Weiss Research in Jupiter, Florida, said the rise is not indicative of an imminent turnaround for the slumping housing market.
"The interest rate market is extremely volatile right now," he said.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.65%, up 0.15 of a percentage point, the highest since the week ended July 21, 2006, when they were at 6.69%.
As rates fluctuate, mortgage applications will probably bounce around week-to-week, Larson said.
The rise in demand for loans to buy homes last week offset lower refinancing activity.
The MBA's seasonally adjusted purchase index, widely considered a timely gauge of U.S. home sales, rose 3.8% to 453.9. The index was 6.8 percent above its reading a year earlier, when it was at 425.0.
The group's seasonally adjusted index of refinancing applications decreased 3.0% to 1,636.9, its lowest since December 2006. The index was up 16.9% from a year ago, when it was at 1,400.5.
The refinance share of applications decreased to 36.2% from 37.8% the previous week.
Data Less Reliable
U.S. housing industry indexes, in general, tend to be volatile. Recent data on home sales suggest a delayed recovery for the hard-hit sector.
For some analysts, the MBA's weekly mortgage applications data has become increasingly unreliable as a gauge of the state of the U.S. housing market.
"These numbers have become so volatile in recent months that it is impossible now to have a strong view on what the data will do in any particular week," Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York, said in commentary published Tuesday.
While the trend in the purchase index has risen, the pending existing home sales index continues to drop sharply. Therefore, the trend in applications has not been followed by an increase in home sales activity, he said.
"If rising mortgage applications were going to lift sales, it would have surely happened by now," he said.
Nevertheless, higher mortgage rates should almost guarantee lower loan demand.
Fixed 15-year mortgage rates averaged 6.31%, up from 6.20%. Rates on one-year adjustable-rate mortgages, or ARMs, rose to 5.60% from 5.49%.
The ARM share of activity decreased to 20.4% from 21.0% the previous week.
The MBA's survey covers about 50% of all U.S. retail residential loans. Respondents include mortgage banks, commercial banks and thrifts.
- For nearly three decades, these on-call experts have been dishing advice on how to – and not to – cook turkey.
- Eric Schmidt pledges to create a virtual copy of the Iraq National Museum at Google’s expense.
- Bill Griffeth is taking a leave of absence from CNBC and Power Lunch for a year. Here's a message from Bill.
- More shoppers than ever plan to comparison-shop this season. Who will benefit?
- It may be the most unusual guide to business you'll read.
- How can you get out of debt and back on the road to recovery? Follow these ten steps.











