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U.S. mortgage applications surged in the latest week, driven by a spike in demand for refinancing as the average rate on 30-year fixed-rate home loans fell, the Mortgage Bankers Association said on Wednesday.
Refinancing applications jumped 30 percent in the week ended March 13 as the borrowing rate dipped 0.07 percentage point to 4.89 percent, tying the record low reached in early January in a survey that dates to 1990.
The MBA's market index, which includes both purchase and refinance loans, jumped 21.2 percent to 876.9, the highest since mid-January.
But purchase applications rose just 1.5 percent last week to 257.1, a one-month high.
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AP |
The Mortgage Bankers Association said its seasonally adjusted refinancing applications index jumped 29.6 percent in the week ended March 13 to 4,497.6, also the highest level since mid-January.
Home loan rates have fallen as the government has purchased more than $250 billion of mortgage-related assets and announced unprecedented steps to stabilize the deepest housing slump since the Great Depression.
A year ago, the average rate on a 30-year mortgage was closer to 6 percent.
The Federal Reserve purchases of mortgage-related assets is nearing the half-way mark targeted by the end of June to help cut mortgage costs and revive housing.
The programs are widely expected to be expanded to bring borrowing costs down, stimulate purchases and help struggling homeowners to refinance and avert foreclosure.
Demand for purchases has been lagging refinancing applications.
While homeowners are often compelled to cut current costs, worries about job loss or hopes that prices will cheapen further have keep many potential buyers at bay.
Refinancings requests represented about 73 percent of all mortgage applications last week.
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Data is a real-time snapshot *Data is delayed at least 15 minutes