| NEW YORK, July 21
NEW YORK, July 21 U.S. mortgage applications
jumped last week as demand for loans to purchase homes rose for
the first time in five weeks, the Mortgage Bankers Association
said on Wednesday.
In addition, demand for home refinancing loans hit the
highest level in 14 months as interest rates reached their
lowest in at least 20 years, the industry group said.
The data provided a glimmer of hope for a housing market
that has been struggling since the expiration of popular
homebuyer tax credits.
The Mortgage Bankers Associations said its seasonally
adjusted index of mortgage applications USMGM=ECI, which
includes both purchase and refinance loans, increased 7.6
percent for the week ended July 16.
The four-week moving average of mortgage applications,
which smooths the volatile weekly figures, was up 4.9 percent.
The MBA said borrowing costs on 30-year fixed-rate
mortgages, excluding fees, averaged 4.59 percent, down 0.10
percentage point from the previous week, and the lowest level
ever recorded in the survey, which has been conducted weekly
Interest rates were also below their year-ago level of 5.31
"The strength in purchase applications comes from
government loans, likely indicating that prospective buyers are
drawn by the lower downpayment requirements," Michael
Fratantoni, the MBA's vice president of research and economics,
said in a statement.
The seasonally adjusted purchase index USMGPI=ECI, a
tentative early indicator of home sales, increased 3.4 percent
after hitting a 13-year low the previous week. Demand, however,
is down about 42 percent since the homebuyer tax credits
For a graphic on mortgage applications, click on:
Dean Maki, chief U.S. economist at Barclays Capital in New
York, said the housing market is trying to find a bottom after
the April 30 expiration of the tax credits.
"The tax credits made things a lot more choppy," he said.
"We will continue to see a payback from the tax credits through
the next few months and then we will return to a gradual upward
"We are expecting a continued gradual improvement in the
labor market and that will also lend support to the housing
market going forward," he said.
The MBA's seasonally adjusted index of refinancing
applications USMGR=ECI increased 8.6 percent, reaching the
highest level since the week ended May 15, 2009.
"Refinance borrowers, aiming for the lowest possible rate,
are getting conventional loans," Fratantoni said in his
The MBA said fixed 15-year mortgage rates averaged 4.05
percent, down from 4.12 percent the previous week, a record
low. Rates on one-year adjustable-rate mortgage, or ARMs,
decreased to 7.17 percent from 7.20 percent.
The Commerce Department on Tuesday said U.S. housing starts
in June hit their lowest level in eight months. For details
double-click on [ID:nN20249501].
More insight into the state of the housing market will
emerge on Thursday when the National Association of Realtors
releases data on existing home sales in June.
(Editing by Leslie Adler)