Lower Rates Fuel Mortgage Applications

Applications for U.S. mortgages rose last week for the first time in four weeks as interest rates slipped to their lowest level since March.
By: Al Yoon: REALTOR® Magazine Online
The number of applications for U.S. mortgages rose last week for the first time in four weeks as interest rates slipped to their lowest level since March.

The Mortgage Bankers Association reported that its seasonally adjusted index of mortgage application activity for the week ended Aug. 4 rose 4.9 percent to 553.3, from the previous week's 527.6.

"The worst of the housing market is behind us," Richard Yamarone, chief economist at Argus Research in New York, told Reuters News. "That's simply because the two primary drivers of housing — interest rates and demographics — are improving."

Borrowing costs on 30-year, fixed-rate mortgages last week averaged 6.45 percent, down from 6.62 percent in the previous week. The rate on 15-year, fixed-rate mortgages decreased to 6.10 percent from 6.28 percent. The average rate on a one-year ARM declined to 5.96 percent last week from 6.18 percent.

The refinance share of mortgage activity increased to 38 percent of total applications from 37 percent the previous week.