U.S. mortgage applications rose for a second straight week, largely reflecting a rise in demand for home purchase loans as interest rates held steady, 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 Oct. 12 increased 0.7 percent to 656.3.
The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was down 0.6 percent 649.8.
Overall mortgage applications last week were 12.0 percent above their year-ago level.
Some market analysts say mortgage application data has been inflated in recent months as prospective borrowers file multiple applications to obtain a single loan. Mortgage lenders have tightened standards as subprime mortgage defaults mount.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.40 percent, unchanged from the previous week.
Interest rates were above year-ago levels at 6.33 percent. The MBA's seasonally adjusted purchase index rose 2.1 percent to 429.1. The index came in above its year-earlier level of 384.7, a rise of 11.5 percent.
The group's seasonally adjusted index of refinancing applications decreased 1.1 percent to 1,980.9. The index was up 12.7 percent from a year ago when the index stood at 1,758.2.
The refinance share of applications decreased to 45.3 percent from 46.2 percent the previous week.
Recent U.S. housing industry indexes, while volatile, generally point to a weak outlook for the industry, suggesting a delayed recovery for the hard-hit sector.
Fixed 15-year mortgage rates averaged 6.09 percent, up from 6.03 percent. Rates on one-year adjustable-rate mortgages (ARMs) increased to 6.17 percent from 6.15 percent.
The ARM share of activity decreased to 13.5 percent, down from 13.6 percent the previous week.
The MBA's survey covers about 50 percent of all U.S. retail residential loans. Respondents include mortgage banks, commercial banks and thrifts.
The MBA said the latest week's data were adjusted for the Columbus Day holiday held on Monday, Oct. 8.