U.S. mortgage applications skyrocketed during the first week of 2007 as interest rates fell for the first time in five weeks, lending support to the view that the housing market is stabilizing, an industry trade group said.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity jumped 16.6 to 671.1 for the week ended Jan. 5.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.13%, down 0.09 percentage point from the previous week. Interest rates were above year-ago levels of
6.08%.
The MBA's seasonally adjusted purchase index soared 16.2% to 472.8, its highest since the week ended Jan. 20, 2006 when it reached 473.7. The index was also above its
year-ago level of 457.4.
The purchase index is considered a timely gauge of U.S. home sales. The group's seasonally adjusted index of refinancing applications surged 17.3% to 1,923.8.