Source : Business Times - 18 Mar 2009
US mortgage applications surged in the latest week, driven by a spike in demand for refinancing as the average rate on 30-year fixed-rate home loans fell, the Mortgage Bankers Association said on Wednesday.
Refinancing applications jumped 30 per cent in the week ended March 13 as the borrowing rate dipped 0.07 percentage point to 4.89 per cent, tying the record low reached in early January in a survey that dates to 1990.
The MBA’s market index, which includes both purchase and refinance loans, jumped 21.2 per cent to 876.9, the highest since mid-January.
But purchase applications rose just 1.5 per cent last week to 257.1, a one-month high.
The Mortgage Bankers Association said its seasonally adjusted refinancing applications index jumped 29.6 per cent in the week ended March 13 to 4,497.6, also the highest level since mid-January.
Home loan rates have fallen as the government has purchased more than US$250 billion of mortgage-related assets and announced unprecedented steps to stabilise the deepest housing slump since the Great Depression.
A year ago, the average rate on a 30-year mortgage was closer to 6 per cent.
The Federal Reserve purchases of mortgage-related assets is nearing the half-way mark targeted by the end of June to help cut mortgage costs and revive housing. The programmes are widely expected to be expanded to bring borrowing costs down, stimulate purchases and help struggling homeowners to refinance and avert foreclosure.
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