Mortgage Applications RISE?

Mortgage Bankers Association reports that activity index increased for the second straight week, hitting its highest level since mid-May.

September 13 2006: 7:46 AM EDT

NEW YORK (Reuters) -- U.S. mortgage applications rose for a second consecutive week as demand for home purchase loans hit its highest level in two months, an industry trade group said Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and purchasing loans, for the week ended Sept. 8 increased 3.2 percent to 584.2 from the previous week's 566.3, its highest since mid-May.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.32 percent, edging up 0.01 percentage point from the previous week. Interest rates were above year-ago levels of 5.72 percent, but below a four-year high of 6.86 percent touched in June.

The MBA's seasonally adjusted purchase mortgage index, widely considered a timely gauge of U.S. home sales, rose 5.3 percent to 410.2, its highest since early July. The index, however, was substantially below its year-ago level of 513.4.

The group's seasonally adjusted index of refinancing applications increased 0.1 percent to 1,597.0. A year earlier the index stood at 2,198.7.
The refinance share of applications decreased to 40.3 from 41.0 percent the previous week.

Fixed 15-year mortgage rates averaged 5.98 percent, up from 5.97. Rates on one-year adjustable-rate mortgages (ARMs) increased to 5.96 percent from 5.91. The ARM share of activity decreased to 25.5 percent of total applications from 26.2 the previous week, its lowest level since October 2003.


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