U.S. mortgage applications rose last week, with demand hitting its highest level in nearly a year as interest rates hovered near recent lows, 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 Nov. 9 increased 5.5 percent to 707.3, its highest since the week ended Dec. 8, 2006, when it touched 721.2.
Economists say that this data has been skewed in recent months, however, as prospective borrowers have been filing multiple applications to obtain a single loan due to widespread tightening of lending standards.
The MBA's data also counts all applications, including borrowers who are ultimately denied.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.19 percent, up 0.03 percentage point from the previous week. Two weeks prior, interest rates reached 6.15 percent, the lowest since the week ended May 11, when they stood at 6.13 percent.
Interest rates were above the year-ago level of 6.15 percent.
Fixed 15-year mortgage rates averaged 5.77 percent, unchanged from the previous week. Rates on one-year adjustable-rate mortgages (ARMs) increased to 5.98 percent from 5.94 percent.
Overall mortgage applications last week were 9.2 percent above their year-ago level. The four-week moving average of mortgage applications, which smoothes the volatile weekly figures, rose 1.9 percent to 679.0.
Demand for both home purchase and refinancing loans rose last week.
The MBA's seasonally adjusted purchase index, widely considered a timely gauge of U.S. home sales, rose 4.8 percent to 432.6. The index came in above its year-earlier level of 412.9, a rise of 4.8 percent.
The group's seasonally adjusted index of refinancing applications increased 6.4 percent to 2,315.7. The index was up 14.5 percent from a year ago when the index stood at 2,022.2.
The refinance share of applications increased to 50.2 percent from 49.1 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.
The National Association of Realtors said on Tuesday pending home sales rose 0.2 percent in September but were still more than 20 percent lower than they were a year ago. Wall Street economists had expected pending sales to fall 2.8 percent.
The ARM share of activity increased to 15.5 percent, up from 14.2 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.