Purchase Mortgage Applications Post Largest Rise Since May
Original Post Date: September 8, 2010
By: Nick Timiraos
The anemic housing market showed a few signs of life last week, with near-record low mortgage rates boosting new home-purchase applications by 6.3% from the previous week.
The increase came as average rates on 30-year fixed-rate loans stood at 4.5%, up slightly from 4.43% during the previous week but at their second lowest level since the Mortgage Bankers Association began its tally in 1990. The effective rate decreased, however, because the average points paid fell to 0.96%, down from 1.34%, during the prior week.
Purchase applications hit their highest level since the end of May, but home-buying activity is still way off of levels seen earlier this year, when tax credits juiced sales. Applications are also around 40% below the level recorded one year ago, when prices were lower and a tax credit was also in effect.
Refinance applications fell by 3% last week, the first decline in six weeks. Refinance activity accounted for nearly 82% of all mortgage activity last week.
The average interest rate on 15-year fixed-rate loans increased to 4% from 3.88% during the previous week, but the effective rate fell because the average points fell to 0.87%, down from 1.45% in the prior week.
Update: This post was corrected. An earlier version of this post incorrectly said that the MBA’s survey data went back to 1972.