Refinancing Rush Pushes Mortgage Applications Up

Demand for applications to purchase US homes and refinance existing mortgages rose last week, after total loan requests fell the prior two weeks, an industry trade group said on Wednesday.

AP

The Mortgage Bankers Association said its seasonally adjusted index of home loan application activity increased 2.4% to 652.0 in the week ended Oct. 5.

The index has been fairly range bound in recent weeks, after slipping to about 607 both in February and again in July, and rising as high as about 691 in March.

The trade group's gauge of home purchase applications gained 2.1% to 420.2, and the refinancing measure rose 2.7% to 2,003.2 on a seasonally adjusted basis last week.

Homeowners are scrambling to refinance adjustable mortgages before they reset to much higher interest rates.

Refinancing requests represented 46.2% of total applications last week, up slightly from 46.0 the prior week, the MBA said. Adjustable-rate mortgages accounted for 13.6% of the total, down from 13.8%.

Average 30-year fixed mortgage rates increased 0.08 percentage point to 6.40% last week, which is 0.13 point higher than the same week a year ago, according to the trade group.

Among shorter-term loan products, the one-year adjustable-rate mortgage rate dipped 0.05 percentage point last week to 6.15%, up 0.27 point from the same week a year earlier.